INSIGHTS FOR PROFITABLE SHIPPING

8 July 2010 Volume 369 Issue 6590 Price £10.50 www.fairplay.co.uk

Why is it proving so
difficult to find a way of
weighing containers?

Weighing up
the options
INSIDE THIS ISSUE MARKETS: Delinking the renminbi COMMERCE: Chinese boost for DnB
NOR REGULATION: US sets shipping sanctions trap TECHNOLOGY: Mixed messages on sewage
LOGISTICS: Colombo’s tracks to recovery DECISION-MAKERS: Lakshmi Venkatachalam
this week 8 July 2010
volume 369 issue 6590
every week

4 Cover Story: 3 Look Out

?
Shipping must recognise it is part of the
A weighty issue logistics chain. Opening up Africa
Weighing containers would help eradicate
many problems that currently plague the 4-5 Story of the week
box trades. So why is there such resistance Stowage and weight issues continue to
to adopting the practice? asks Miriam Fahey hinder the container sector

[Cover photo: iStockphoto ] 6-15 Markets

Boxship charter earnings may soften.
Evergreen confirms first newbuilding
6 Markets: Summer 16 Trade & Commerce: order. Delinking the renminbi from the
dollar. Fall in S&P activity. China’s car
driving season begins DnB NOR wins licence to production bonanza. Market numbers
The US driving season usually signals an lend in renminbi
increased demand for gasoline – and MR The Scandinavian bank is now in a 16-23 Trade & commerce
tanker rates remain firm. Paradoxically, strong position to lend to Chinese Russia cracks down on Moldavian wine
higher vehicle efficiency standards could customers such as state-shipping lines imports. Sturrock increases Asia activity
also increase transport fuel demand. including Cosco and Nanjing Tanker into Africa. ACM buys Australian dry
Michael Jones reports Corp. Hal Brown reports cargo broker. Stolt-Nielen cautious on
profits rise. Strikes hit Greece’s main
port. Opening up Artic trade. German
24 Regulation: US banks seek Asian input. Eitzen shifts
focus to ship management. Investment
shipping sanctions trap in Boulogne port pays off
The hopes of the international shipping
community have been dashed by the 24-25 Regulation
signing into law of the draconian Emissions trading
Comprehensive Iran Sanctions Act 2010
by President Obama on 1 July. Greg 26-27 Technology
Miller looks at the implications Nutrient content evaluation of sewage
discharge. Bridge navigation watch alarm
systems. Multi-function icebreakers
32 Decision-makers:
28-29 Logistics & supply chain
Lakshmi Venkatachalam Sri Lanka’s economic revival. Teu rates
The former Director-General of Shipping, continue to soar. Gulf rail timetable
and current VP of the Asian Development
Bank in Manila, tells Ramadas Rao about 31 Shoes & ships
her concerns that over regulation and
lack of flexibility could stifle growth of the 35 Movers & shakers
Indian economy
36 Shipping in numbers

Monitor, maintain and

manage safety onboard www.wilhelmsen.com/shipsservice

Unitor Seaguard 2010 lifejackets � Immersion suits servicing � Liferaft rental

www.fairplay.co.uk 8 July 2010 1

 Richard Clayton
Fairplay Editor

look out
Telling them why it matters
Shipping is a part of the logistics chain and must act accordingly

Container shipping is a part of the wider
logistics and supply chain. Carriers and the
ships they operate must be viewed along-
side shippers, terminals and other cargo
handlers, cargo manufacturers and other
transport providers. Problems arise when
any part of this collection of logistics play-
ers declines to take responsibility for what
they do. The consequences run deep.
The issue of misdeclared containers (see
p4) is a classic case of certain players (ship-
pers) failing to understand the implications
of deliberately recording a weight they
know to be false. From their point of view,
they have been doing it for years and no
one has suffered as a result.
Shippers should care, not because an
individual cargo supplier will be prosecuted
if a stack of overweight boxes collapses in
heavy seas; not because this might lead to
the stability of the vessel being compro-
mised; not because the safety of the ship’s
crew is endangered. They should care
because the shipper has a duty of care for
those further down the chain.
Last month a London conference at-
tracted attendees with its subtitle ‘is
[weighing containers] really that difficult?’
Not many moons ago, this magazine at-
tended a similar conference that sought to
learn the lessons of the stack collapse on
the feeder ship Annabella. The discussion
led to a series of best practice guidelines.
Done and dusted, readers might have
thought. But no – there’s still enough life
in the issue to generate further angst.
The options include further legislation
to make weighing containers mandatory,
cajoling the IMO to place overweight
boxes on the safety agenda, and impress-
ing on manufacturers, shippers, handlers,
even seafarers, that safety matters.
Fairplay believes that last option is the
only option. Investing in new technology
is both reasonable – no, weighing con-
tainers isn’t that difficult – and achiev-
able. But it involves the shipping sector
understanding that there are elements
of the supply chain above and below the
sea passage. Explaining why something
is critical is half way to getting it imple-
mented. Pursuing legislation in Brus-
sels or agenda items at the IMO won’t
guarantee safety.  F

Agency goes global

Brazilian president Lula’s latest
visit to Africa appears to have
excited the global media, but
what was once called the dark
continent has long been in the
spotlight. Obiageli Ezekwe-
sili, World Bank VP for Africa
Region, said this week that
Africa had reported sustained
growth at an average of almost
6% over the past 10 years. The
recession trimmed the pace of
expansion but not its energy.
Africa is today where China
and India were 30 years and 20
years ago, respectively, claimed
the former Nigerian minister
at an awards dinner in London.
“That’s a good place to be be-
cause we know the revolution
that subsequently happened to
these countries.”
That’s the context for an
interesting corporate acquisi-
tion that saw South Africa’s
Sturrock Shipping take over
the holding company of four
Australian ship agency busi-
nesses. These agencies have
strong ties with Asian clients,
and these companies are keen
to strengthen their presence in
Africa. So Sturrock, hitherto a
tanker specialist on the south-
ern and eastern coasts, has
secured a dry bulk partner that
will open up the lucrative West
Africa coast.
The forum at which initial
discussions were held was the
Fonasba gathering in Cape
Town last October. Ironically,
the meeting this October is to
be held in Sydney. Sturrock is
expected to be greeting col-
leagues warmly.  F

www.fairplay.co.uk 8 July 2010    

story of the week

Weighing up
the options
Weighing boxes would help solve many problems that
plague the trade. So why is there such resistance to
adopting the practice? Miriam Fahey reports

Why are containers
not weighed?
Carriers want to keep their client shippers
happy by not insisting on weighing their
containers
Productivity concerns
Lack of understanding of the dangers of bad
stowage and stacking to vessel stability
Cost saving
Weighing is not mandatory
S
towage and weight issues continue
to plague the container sector
two years after the publication of
Safe Transport of Containers by Sea
– Guidelines on Best Practices by the Inter-
national Chamber of Shipping and the
World Shipping Council. With no
solution in sight, calls are grow-
ing for tighter legislation, but are
carriers to blame or is malpractice a
sector-wide concern?
A conference in London in June
appears to have emphasised broad
ignorance among the shipper com-
munity of why it is important to
stow containers correctly and pro-
vide accurate information on variables
such as weight. The ICS/WSC guidelines
stressed that overloading of containers
can never be condoned and declarations
of weight must be truthful. But there is no
legislation governing this practice and con-
tainer lines rely on shipper honesty.
While shippers will not suffer the con-
sequences of badly stowed and stacked
containers, seafarers will. Relying on
honesty isn’t good enough when shippers
“don’t care”, opined Peter King, a master
mariner and now MD of marine surveyor
Seden Clarke in Felixstowe, the UK’s largest
box port. Stacking containers correctly is
vital because lashing undergoes tremendous
strain when ships operate in heavy weather.
The case that highlighted the dangers
of poor stacking was the feeder vessel
Annabella, which suffered a stack collapse
while running through the Baltic Sea in
February 2007. A report into the incident
identified a series of failings, including
computers not programmed to differentiate
between 30ft and 40ft boxes and declared
weights that were wildly inaccurate.
Misdeclaration of weight is a serious
safety violation, observed Michael Valcic,
operations manager at MOL. “For the ship,
it’s a question of physics,” he told the con-
ference, but for the shipper it’s a question
of understanding. He cited the case of one
carrier in South Africa which found a ship-
per had deliberately misdeclared 25 tonnes
of bananas as 20 tonnes “because, as they
ripen, bananas shrink”.
Valcic could not see what financial gain
shippers made by misdeclaring cargo, but
the problem goes deeper than trying to
secure a small saving. Shippers and cargo
handlers don’t understand the dynamics
of a ship. “The client might not know that
we [carriers] need weight to calculate the
strength of the vessel,” he added.
Other speakers supported this concern,
including Steve Cameron of Cameron Mari-
time Resources. Moisture content of con-
tainer cargo can add to weight, he reasoned,
which makes it all the more important to
understand the nature of the contract.
One possible explanation came from H Ali,
CEO of Supply Chain Movers in Ghana. “The
reason why shippers don’t declare the cor-
rect weight is they want to cheat,” he said.
“This means that instead of shipping two
boxes, they send one – for a smaller box

4 8 July 2010 www.fairplay.co.uk


fee.” Most forklifts in Ghana are not fitted
with weight sensors and can offer no solu-
tion to the problem of overstowed boxes.
Weighing containers is hardly rocket sci-
ence and wouldn’t take long to carry out.
Manufacturers at the conference were keen
to offer the latest technology, but a number
of speakers insisted the problem went
further than a carrier, terminal operator or
even a shipper investing in sensors. Respon-
sibility for ensuring containers are safely
shipped involves the entire supply chain, and
this is the vital bit that’s missing
David Wilson, head of health and safety of
Hutchison Ports (UK), said he believed many
terminal operators would suffer reduced
productivity if they had to sideline hundreds
chain
of boxes. For that reason, “we have a system
chain
supplychain
shipped
in place. “Until we know what’s happened to
shipped
safelyshipped
ensuring
the container we won’t release it,” he said.
ensuring
forensuring
Asger Lauritsen at Maersk Line said his
company has developed advanced software
for its IT systems calibrating the declared
the entire supply
commodities with the normal trade
weights. Indian tea normally weighs 13.2
tonnes/container, he explained, “and if we
see that a tea container is declared differ-
containers are safely
ently, then we will update the weight in our
systems to get better stowage stability and
Responsibility for
a much higher safety norm for our vessels.”
Lauritsen said he was encouraged to
see that technology on cranes and gate
Responsibility
Responsibility
weights has become so advanced and inex-
pensive that terminals can weigh as trucks
move through the gates, again within
the ‘yard’ and finally at the ‘portal cranes’.
containers
involvesthe
containers
Because most accidents take place at the
terminals, they will now be able to weigh
containers at low cost without losing
productivity. Terminal operators can now
involves
involves
www.fairplay.co.uk
www.fa
f irplay.co.uk
fa
story of the week
share this information with the carrier.
That’s fine for the elite carriers being
handled at the award-winning terminals,
but most container shipping is way off this
advanced technology. Without legislation
making the weighing of containers manda-
tory, malpractice will continue as carriers try
to keep shippers happy. As Peregrine Storrs-
Fox, risk management director of the TT
Club, says: “We see a disturbing number of
cases from misdeclared cargoes. This raises
alarm from a risk management perspective,
as the industry is highly vulnerable”.
Helena Kuronen, head of claims and insur-
ance at Containerships (Finland) believes it
will take a catastrophe to push the con-
tainer shipping sector to make it mandatory
to weigh boxes. Only when lives are lost will
the EU take up this issue, she warned.
Storrs-Fox favours the IMO taking on the
problem of misdeclaration. Accidents hap-
pen when IMO (or similar) requirements are
compromised, and safety margins elimi-
nated, he explained. “The manufacturer and
shipper know the most about a cargo. They
have a responsibility to show it’s correct.”
Information and guidelines are out there
already, but how much is being ignored?
Capt Peter King, probably speaking on
behalf of the seafarer community, continues
to insist on shippers being taught how to
handle containers.
The consensus appears to be that
there’s no need for new legislation, just
implementation of existing guidelines.
But the key is that carriers cannot be the
sole source of safety: misdeclaration of
containers runs through the entire supply
chain, and the issue needs to take tackled
from this perspective. F
8 July 2010 5
Fairplay subscribers have access to listings of newbuildings, ship sales, fixtures and bunker
prices on our website. Go to www.fairplay.co.uk and select the ‘Markets’ link in the top menu
Evergreen Shipping: resumes newbuild ordering Assessing the implications: as China dumps the
renminbi’s dollar peg Pricing anomalies: exposed as earnings fall China: car production bonanza
The summer driving season begins
The US driving
season signals
an increased demand
for gasoline imports.
Michael Jones reports
The summer driving season is
well under way in the US and
motor gasoline stocks have been
drawn down by 14M barrels in the
past three months, according to
reports by the US Energy Informa-
tion Agency (EIA).
Despite US refinery utilisation
levels rising to 89.4% – their high-
est in two years and in line with
seasonal variations – consumer
demand has taken hold, reports
McQuilling Partners. Drivers have
benefited from a price decline of
$0.15/gallon, to $2.44 on average
($0.64/litre), primarily due to
lower crude prices. The EIA proj-
ects prices will rise to $2.92/gal-
lon ($0.77/litre) in 2011.
Motor gasoline imports to the
US were 127,000bpd lower from
March to May compared to 2009,
says the EIA. But demand is
forecast to increase in3Q10 – by
a further 80,000bpd increase
by the end of the driving season
(end 3Q10). MR tankers on TC2
(UK/Continent to US Atlantic
Coast, 37,000 tonnes) are cur-
rently earning just over $15,000/
day (see graph above), around
    8 July 2010
TC2 rates (UK/Continent to US Atlantic coast)
��,���
��,��� TCE ���,��� tonnes�
Worldscale ���,��� tonnes�
TCE ��/day�
��,���
�,���
� ��
Jul ��
$15,000/day
daily TCE for TC2 route
W197.5 – very nearly a high
for the year.
The future of US motor gaso-
line demand was addressed by
the IEA’s Medium-Term Oil and
Gas Markets report. It says that
increasingly strict fuel efficiency
regulations for new cars (and
light-duty trucks) could be
setting up a decline in demand.
In the medium term, the EIA
expects a decline of 0.6% annu-
ally from 2009 to 2015 – the
forecast period.
Underpinning the IEA forecast
are assumptions about fleet size,
vehicle miles travelled, average
mileage and the relationship
between these variables.
Gasoline imports are forecast
to increase by 80,000bpd by
the end of the driving season
The IEA foresees the US gaso-
line-powered vehicle economy
improving by 1.9%/year to
2015, if historical trends for GDP
remain. Complicating the projec-
tions are fleet growth of 1.2%/
year and vehicle miles travelled
(up 0.1%/for 2010) but declining
0.3% thereafter – a continuation
of a trend.
Despite pressures from ethanol
blending, the IEA says, “the fall
in US gasoline demand is not
irreversible in the long term.”
Moves to enforce higher vehicle
efficiency (such as required by
the standards from 2017), “could
also paradoxically increase trans-
portation fuel demand, even
[ Source: Baltic Exchange ]
���
���
Worldscale
���
���
Jul ��
under higher oil prices. Indeed,
higher fuel economy may lower
the average cost/mile driven,
spurring drivers to increase their
average VMT” and co-inciden-
tally renew the attractiveness of
the light truck market and “thus
slow or even reverse an assumed
rebalancing of the fleet away
from less efficient, larger vehicles
towards passenger cars.”
The EIA forecasts that liquid
net fuel imports (crude oil/
refined products), which had
fallen by 1.4M bpd in 2009, will
continue to decline in 2010
by an additional 110,000bpd.
Imports are forecast to increase
by 90,000bpd in 2011.  F
www.fairplay.co.uk

Box ship charter rally tailing off
Fixing activity for box
ships has slowed down
as the northern
hemisphere’s holiday
season takes hold
Container ship timecharter
earnings continued to rise last
week, but the next few weeks
may become more challenging
for shipowners, with much lower
requirements being posted
by operators.
More worryingly perhaps, key
economic indicators in Europe,
the US and China are increas-
ingly pointing to a slowdown in
growth that would inevitably
have an impact on global con-
tainer traffic.
The Eurozone Manufactur-
ing PMI (purchasing managers’
index) from information services
group Markit dropped to 55.6 in
June – down from 55.8 in May, as
the growth in new orders lost its
earlier impetus.
Consumer confidence dips
The corresponding decline in the
new orders-to-inventory ratio
suggests “that output growth
may weaken further from the
strong rates seen during the first
half of the year,” Markit said. The
group’s chief economist, Chris
Williamson, warned, “Of greatest
concern is a slowing in growth
of new orders to the weakest so
far this year, as manufacturers
face tougher trading conditions
arising from the shift in policy
from stimulus to austerity, the
region’s sovereign debt crisis and
a slowing in growth of global
trade flows.”
In the US, the Conference
Board – a private research group
based in New York – said its Con-
sumer Confidence Index dropped
www.fairplay.co.uk
almost 10 points to 52.9, down
from the revised 62.7 in May.
June’s reading marked the big-
gest drop since February, when
the index fell 10 points. The
index had risen for three straight
months since then.
Manufacturing output in
China, the most important load-
ing region for container vessels,
eased off last month, ending a
14-month period of expansion,
according to HSBC. The bank’s
China Manufacturing PMI
dropped by 2.3 to 50.4 in June in
what marked a distinct turn-
around from strong growth seen
throughout Q1.
The latest ConTex figures indicate
the positive trend is still in place
for most class sizes. However,
the 4,250teu Panamax segment
experienced stronger headwinds
as the average rate for 24-month
periods dropped
Even so, the bank’s chief
economist for China, Hong-
bin Qu, gave a comparatively
optimistic outlook. “Fears about
a hard landing are overplayed,”
he said. “We expect China to
achieve around 9% growth in
2H10, underpinned by massive
ongoing investment and robust
private consumption.”
Many economists in the west
agree that growth should ease in
the second half of the year but
they dismiss the prospect of a
double-dip recession. Denmark’s
Danske Bank is still upbeat about
freight demand from European
shippers, although its leading
European Freight Forwarding
Index for ocean freight dropped
from 63 to 61 in the latest poll
among forwarders. “Based on our
discussions with the partici-
pants, we are less worried this
month than we were last month.
People generally feel that the
freight market will lose a little
momentum during the summer,
but this will not threaten the
underlying recovery,” Danske
Bank said.
Owners on guard
The question remains whether
growth for the rest of the
year will be strong enough to
underpin capacity utilisation
and freight rates in the container
trades. The slowdown in enquiry
for charter tonnage from
the container lines has put
brokers and owners on guard.
“Whether this is a temporary
lull, a seasonal factor or system-
atic of a demand slowdown will
soon become apparent,” com-
mented one broker.
London shipbroker Braemar
Seascope noted in its latest
weekly market update: “The
flurry of requirements, especially
from the Far East seems to have
now been replaced with lines
taking some time to re-evaluate
their services and consolidate
their respective positions in
markets
the market.” It also warned
that many requirements for
larger tonnage are “set to
be filled with own tonnage”
by the lines. “The market is
now likely to enter a period of
consolidation which should
allow slot costs to re-align,”
noted another broker.
Some market observers have
suggested, however, that the
decline in fixing activity is as
much driven by owners as it is by
charterers. “Owners are holding
back from fixing forward and
fixing lay-up positions,” because
they anticipate rates will climb
further, said one German broker.
543
points
closing level for the ConTex last
week, which is still rising, showing
some sector weakess
The latest ConTex figures in fact
indicate that the positive trend is
still in place for most size classes
of container vessels.
The ConTex composite index
rose by 11 to 543 points last
week, with geared 2,500teu and
gearless 2,700teu types posting
the strongest gains.
However, the 4,250teu
Panamax segment that had led
the rate rally in recent months
experienced stronger headwinds
as the average rate for 24-month
periods dropped from $24,039/
day to $23,952/day – the first
decline since inclusion of the
4,250teu type in the ConTex
in early May. �  F
8 July 2010    
markets
Evergreen resumes box ship
newbuilding orders
A fleet procurement
programme just
announced begins with
the first orders for post-
Panamax container ships
Taiwan’s Evergreen Line, the
world’s fourth largest box ship
operator, has announced its first
round of firm orders. An earlier
Fairplay report (10 June 2010,
p11) detailed the potential for
orders of up to 100 container
ships from the company.
The very first order in Ever-
green’s new fleet procurement
programme has been won by
South Korean shipyard Samsung
HI and provides for ten 8,000teu
post-Panamaxes. The vessels,
priced at $103M each, will be split
between the Evergreen Group-
listed arm Evergreen Marine Corp
(which will take six ships) and the
Group’s Panamanian-registered
company Evergreen International
SA (which takes four). Interest-
ingly, this price is less than 20%
lower than the prevailing peak
levels of 2007/8 for ships of this
capacity in South Korea.
However, the Evergreen ves-
sels are understood to be to the
owner’s specification rather than
the yard’s standard design and
will include, among other extras,
Evergreen’s ‘Greenship’ environ-
mental protection systems first
introduced on board the compa-
Evergreen’s Greenship environmental protection
Previous Greenship designs included:
  A double-skinned hull aimed at preventing
accidents and oil spills. In addition, oil tanks
are situated so as to minimise fuel spillage in
    8 July 2010
Evergreen has p����������
rev�������
iously advised
��������
that it is also in the market for
60 (20 each) 7,000teu, 5,300teu
and 2,000teu vessels
ny’s S-type vessels delivered by
Japan’s Mitsubishi HI between
2005 and 2008 (see box).
Delivery of the 24.5kt, 335m
by 46m Samsung newbuildings,
to be known as L-type, is under-
stood to be scheduled for 2012
and 2013.
According to an Evergreen
statement: “The 10 ships are the
beginning of a programme of a
new generation of container ves-
sels that will be ordered by Ever-
green Line from several shipbuild-
ing yards in Asia. Details of the
entire programme will be made
public as the company, founded
the event of an accident
  The ability to plug into shore power in ports.
The ships’ engines and generators can use low-
sulphur fuels while in port
32
8,000teu vessels
are required by
Evergreen
in 1968, continues to negotiate
both the price and the technologi-
cal capability of the shipyards to
meet the carrier’s very strict stan-
dards of environmental protec-
tion and fuel conservation”.
Meanwhile, the company is
understood to have just signed
letters of intent for a further 10
ships of the same design with
fellow South Korean shipyard
STX. In addition, negotiations
are believed to be at an advanced
stage with Taiwanese shipyard
CSBC for 12 ships of this class.
The firming up of these orders
would complete Evergreen’s
  Large holding tanks allow the ships to keep
wastewater onboard until it can be disposed of
at a shore facility. Oily water separators help
reduce the oil content in the wastewater
stated requirement for 32
8,000teu vessels. The company
has previously advised that it
is also in the market for 60 (20
each) 7,000teu, 5,300teu and
2,000teu vessels.
Other major new orders being
reported last week included
an order won by STX itself for
two LR1 product tankers from
Tanker Pacific of Singapore.
The 74,500dwt Panamaxes are
due for delivery between 4Q12
and 3Q13 and options for two
further vessels are attached to
this deal. In April, Tanker Pacific
ordered four Suezmax tankers
from South Korean yard Hanjin
HI for delivery between May and
September 2012.
Meanwhile, Chinese yard New
Century Shipbuilding has won its
first VLCC order after it signed
contracts with Dynacom Tankers
Management of Greece for four
vessels. The 320,000dwt ships
have been priced at $95M each
and are due for delivery between
1H12 and 1H13. It is understood
that they will be built to Hyundai
HI design.
In the Suezmax sector, Jiangsu
Rongsheng Shipbuilding in
China has won an order for two
Suezmax tankers from Frontline
of Bermuda.
The 156,900dwt ships are due
for delivery in February and May
2013, with options for two fur-
ther vessels having been secured
by the owners. Frontline is a
previous customer of the
yard, having contracted four
Suezmax units during 2006.
Three of these have been deliv-
ered this year, with the final ship
due next month.  F
www.fairplay.co.uk
 markets

0.5%
Movement of the renminbi against the dollar, 2004-2010*
��
maximum daily movement of the
renminbi against the dollar
�
The Chinese
will not want
Renminbi/$

�
to expose
themselves to
�
the whims of
the capital
�
���� ���� ���� ���� ���� ���� markets
*Pegging introduced July 2008, removed 19 June 2010

comment First, a stronger renminbi

will help tame domestic
inflation and give the Chinese

Implications of the end of the authorities more room to

adjust interest rates. Second,

Chinese peg to the US dollar

it will help China rebalance
its economy by focusing
on domestic demand and
easing away from exports. A
A stronger renminbi will bring benefits in the long term and contribute to
sustained appreciation will
a more stable world economy but there is a long way to go, according to also reduce global imbalances
Jamie Jemmeson, technical analyst and trader at Corporate FX in the world economy,
therefore reducing the
On 19 June 2010, China an- policy; however the implica- the doors to its currency. likelihood of another financial
nounced that the renminbi- tion and effect are unlikely to The Chinese will not want crisis. An additional near-
fixed-peg to the US dollar, be felt immediately. The Chi- to expose themselves to the term benefit is a probable
which has been in place since nese authorities have stated whims of the capital markets. cooling of the rhetoric out of
July 2008, will be replaced that under the new policy, the In addition to this, the Chinese Washington regarding US-
with a more flexible currency midpoint will be set to reflect government is not going to al- China relations.
regime. There was some scep- market supply and demand, low its 1.3Bn citizens to invest This is undoubtedly a move
ticism about the timing of the although a maximum daily their money wherever they in the right direction but it still
announcement (a week ahead movement will still be 0.5%. want globally. has a long way to go. Another
of the G20 meeting), but this Considering the political state As a result we expect the issue to be monitored will be
is a step in the right direction. of China and the grip that it pace of the appreciation to be whether this move was just
The end of the fixed peg is holds on its own economy, it slow, but a stronger renminbi lip service or is a long-term
a clear break from the current is very unlikely to fully open will have long-term benefits. sustainable policy.   F

  

   

 
          
    

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www.fairplay.co.uk 8 July 2010    

markets
Pricing anomalies are exposed as
brokers report a fall in earnings
A wait-and-see attitude
has taken hold in the
sales and purchase
market, giving rise to
pricing disparities
This week, S&P brokers are
reporting a significant fall-off
in sales activity. This is perhaps
only surprising for the fact that it
didn’t happen sooner, especially
given the steady, day-by-day
weakening of the dry freight indi-
ces and the arrival of the holiday
season in Europe. The latest round
of transactions were, however,
not at notably lower prices, per-
haps supported by the knowledge
that major buyers still have large
sums available to invest should
any clear downward price trend
assert itself.
With the yen once again trad-
ing in the high 80s to the dollar,
any Japanese owners remaining
in the market to sell are unlikely
to significantly reduce their dollar
price ideas and this may put a
further brake on the second-hand
market as we pass the mid-
point of the northern summer.
Anxieties about further economic
turmoil in Europe and the US, and
the risks of a double-dip reces-
sion are forcing most parties back
into the familiar “wait-and-see"
mode. From an observer’s point of
view, some interesting valuation
discrepancies have been seen
in the past week, arising princi-
pally from the different speeds
at which sector earnings have
corrected, as well as reflecting the
preferences of buyers related to
country of build.
The MOL-operated Capesize
Rubin Crane (built 1994 Namura,
    8 July 2010
The MOL-operated Capesize Rubin Crane has
reportedly sold for $24M to Chinese buyers
[ Photo: Southern Cross Maritime ]
‘A clearer than usual premium
has been established for
Japanese tonnage over Chinese-
built ships, with the Handysize
sector providing a good example
this week’
154,310dwt) has reportedly
obtained $24M from undisclosed
Chinese buyers – a price level that
seems remarkably weak consid-
ering recent Panamax sales of a
similar vintage that have achieved
more or less the same price level
for ships with less than half the
total cargo capacity.
Some explanation for this valu-
ation is provided by comparing
the current average timecharter
equivalent spot rates for Cape,
Panamax and Handymax ships,
which sees a remarkable conver-
gence arising from the fact that
Cape rates almost inevitably lead
the smaller bulk carrier sectors
downwards during the course of
a correction. In the longer term,
however, Capes will certainly earn
more on average and the purchase
may represent a canny move by
the investors involved.
Sellers with bulkers already
inspected by buyers are wast-
ing little time in calling for
outright offers, which sends a
clear signal about price expecta-
tions in the near future. In the
Supramax and Handymax sectors,
offers are being invited soon
on the New Orion (built 2003
STX, 52,191dwt), the Maritime
Diamond (built 1995 Oshima,
47,574dwt) and the Clean Seas
(built 1995 Mitsui, 46,640dwt).
In all cases, buyers are expected
to play a game of trying to lower
their maximum bids while
remaining competitive, the usual
preparation for which is a lot of
debate between brokers on either
side of the deal in an attempt
to establish what is needed to
sell and what is likely to be on
the table. Despite earlier reports
of a concluded deal, the similar
vintage Basic Arrow (built 2001
IHI, 48,907dwt) is reportedly still
available for sale, perhaps reflect-
ing a new unwillingness by buyers
to commit to a firm price in a
steadily falling freight market.
A clearer than usual premium
has been established for Japan-
ese tonnage over Chinese-built
ships, with the Handysize sector
providing a good example this
week. While the two-year-old
Chinese Handy Xin Dong Guan 6
(built 2008 Zhoushan Wuzhou,
33,075dwt) was reported sold
for $22.5M, while the Mitsubi-
shi-controlled Royal Forest (built
1998 Hakodate, 31,770dwt)
– 10 years older but built in Japan
– achieved $20.3M. The vessels
are very comparable apart from a
difference in engine makers and
crane load specifications, but the
relative valuation gap can only be
described as yawning.
Some owners, for example
London-listed Hellenic Carriers,
are taking advantage of this type
of valuation discrepancy by selling
older Japanese bulk tonnage and
investing in Chinese newbuild-
ings, prices of which remain very
competitive despite the likelihood
of an increase in material and
equipment costs. The Hellenic
strategy is illustrated by its recent
sale of Hellenic Breeze (built 1993)
at $22.5M and its subsequent
order last week for two 82,000dwt
Kamsarmax ships at Zhejiang
Ouhua Shipbuilding at $34.2M
each, for deliveries early in 2013.
Another Ouhua Kamsarmax
from earlier in the same series
(delivery in 2012) is believed to
have been sold by Paragon Ship-
ping for about $36M in a resale
deal to a fellow Greek buyer.
Such price levels are no higher
www.fairplay.co.uk
 markets

than the prices currently payable

for Japanese Supramax resales IHS Global Insight Chinese automotive industry forecast
with similar delivery timing, and
by comparison Cido Shipping is Type 2010 2011 2012 2013 2014 2015
reportedly aiming for $50M each Total car: 10,785,875 12,050,224 12,808,227 13,543,730 14,159,168 14,713,841
for two Japanese Kamsarmaxes %CHG 24.6% 11.7% 6.3% 5.7% 4.5% 3.9%
due for delivery from Sasebo,
Total HCV: 1,169,956 1,155,379 1,214,550 1,201,394 1,156,463 1,152,986
albeit at the end of this year.
%CHG 18.4% -1.2% 5.1% -1.1% -3.7% -0.3%
Activity in the tanker market
remains slow, with numerous Total LCV: 5,059,801 5,335,419 5,532,638 5,704,065 5,962,621 6,222,372
ships potentially for sale but %CHG 17.5% 5.4% 3.7% 3.1% 4.5% 4.4%
very few buyers ready to pay up Grand total: 17,015,632 18,541,022 19,555,415 20,449,189 21,278,252 22,089,199
and bargain hunters biding their %CHG 21.9% 9.0% 5.5% 4.6% 4.1% 3.8%
time in the hope of a new round
[ Source: IHS Global Insight ]
of price reductions. In contrast
to this trend has been the sale of

China’s car production bonanza

United Product Tankers’ Japanese-
built MR type Mount Olympus
(built 2003 Saiki, 40,011dwt),
which reportedly achieved $24M told an audience at an industry

from undisclosed interests.
The vessel has been on the
market for several months. Unlike
most Japanese-built product
tankers, however, it features a one
tank-one pump specification and
an IMO 3 class notation which
adds to the range of cargoes which
it can carry. As a reference the
last MR type sold was the larger
Pacific Serenity (built 2003 Naikai,
47,999dwt) at $24.2M in May.
The revival in container char-
ter rates is feeding through to
improved prices and steady sale
and purchase activity. Paragon
is believed to have bought two
3,400teu newbuilding resales due
for delivery promptly from HDW
in Kiel for about €40M ($49M)
each from NSB Niederelbe, while
Technomar is said to have paid
$17M for the 2,890teu Tara
(built 1996 Kvaerner Warnow,
38,400dwt) which has already
been delivered in Singapore and
re-named Pisti.
In the smaller geared feeder
market, the 1,732teu Hansa
Sonderburg (built 2000 Binji-
ang, 23,577dwt) has been sold
for $16M, while Italian buyers
are said to have purchased the
1,042teu Mekong Spirit (built
1996 Stocznia Szczecinska,
12,380dwt) for about $7.4M. F
Fuel duty changes
are helping to drive a
strong domestic car
demand but exports
remain low
The year-on-year increases in
Chinese passenger car purchases
have slowed in the past month
from 25% reported in May
to 11% year-on-year for June
2010. This adds to signs that the
economy is cooling, says a report
from Bloomberg.
In May, China produced
slightly more than 1M vehicles
for its domestic markets, accord-
ing to Chinese statistics, while
June saw 839,229 vehicles sold,
reports the China Automotive
Technology and Research Center.
Over the first five months of this
year, the production figure was
7.5M vehicles, 56% higher than
the same period in 2009 and
a staggering 87% higher than
January to May in 2008.
Over 2009, the country
produced nearly 10.5M units
compared with 6.7M in 2008.
China could manufacture 15M
vehicles in 2010, Gu Xinghua,
deputy secretary general of the
China Association of Automo-
bile Manufacturers (CAAM),
function in Shanghai. This
falls short of the pre-recession
numbers in the giant American
auto sector, a figure of 16-17M
passenger vehicles. The trend
is sharply upwards. In 2009,
China became the largest auto
market in the world – helped
by the stimulus plan and by
economic growth. By 2011
production may reach 21.5M
units across all sectors of the
automotive industry.
IHS Global Insight (IGI)
says that despite increases it
forecasts production of cars
with less than 1.6 litre engines
will increase by 26.7% to 10.7M
units. Light commercial vehicles
(LCV) will grow 22.% to 5.42M
in 2010. The Chinese State
Information Centre’s estimate
is in broad agreement with IGI
forecasts, predicting a produc-
tion total of 16M units this year.
IHS Global
Insight suggests
Chinese car
exports could
reach 235,000
units by 2011
16.1M
China’s estimated vehicle
production for 2010
This huge industrial output
will have little impact on the car
carrier sector while it continues
to focus on domestic demand.
For 2010, IGI projects that
Chinese passenger car exports
will grow by 37% to 161,000
units. Recovery in the Russian
and Egypt markets in the first
four months of 2010 are the
principal drivers. By 2011, IGI
suggests exports could reach
235,000 units.
Other shipping industry
sectors will profit from the com-
modities (iron ore, coking and
thermal coal, copper (ore and
scrap) brought in to support the
automobile industry. Baosteel
Group, China’s second larg-
est steel maker, has said steel
demand for autos has slipped
recently, adding further proof
of a cool-down in the Chinese
economy. IGI expects China’s
growth to accelerate to the
low 10% range year-on-year in
2010, before pulling back to the
mid-8% range in 2011. F

www.fairplay.co.uk 8 July 2010    
shipping markets Weekly summary of all the key
industry indices and data

Baltic dry indices

BDI: 2,280      221 (-9.7%) ����

����
-3.4% Capesize Index -24.4% Panamax Index
����
This week: 2,627 3 mth high: 5,455 This week: 2,447 3 mth high: 4,622
����
Last week: 2,717 3 mth low: 2,627 Last week: 3,045 3 mth low: 2,447
����
Supramax Index Handy Index

index value
-6.4% -5.7% ����

This week: 1,995 3 mth high: 3,111 This week: 1,118 3 mth high: 1,520 ����
Last week: 2,122 3 mth low: 1,995 Last week: 1,182 3 mth low: 1,118 ���� BDI
Outlook: Capesize rates in the Atlantic slipped again with the Brazil-China trades softening to the low $20s/ ���� BFA BDI July ��
tonne after Vale appears to have pulled back from the market. Fixtures for Capes in the Pacific were most common, ��� BFA BDI �Q��
but despite demand Western Australia-China has drifted below $8.50/tonne. Lack of enquiry has made Panamax �

��/��

��/��

��/��

��/��

��/��

��/��
rates soften with brokers not optimistic about a pick-up this week particularly for vessels in the US Gulf and South
America. The Pacific saw rates softening as new vessel deliveries and more to come, as well as a lack of cargoes, have
impacted the outlook. Handysize rates have an ever increasing gap developing between west and eastern levels. [ Source: Baltic Exchange data ]

Baltic tanker indices

Outlook: In clean tanker trading (Gulf to Japan), Dirty tankers
LR2 market cargoes have been focused on the first
half of July, which has tight tonnage lists and fewer Baltic dirty tanker index VLCC TCE Suezmax TCE Aframax TCE
ships are spot for the next couple of weeks, reports This week: 831 This week: $20,081/day This week: $13,545/day This week: $12,202/day
Braemar Seascope. However, end of July positions Last week: 917 Last week: $36,501/day Last week: $21,842/day Last week: $15,673/day
can be covered easily, so rates may soften. LR1s and
MRs in the Gulf have seen rates slide despite thinning Clean tankers
tonnage lists. Clean trades from the Continent saw
Baltic clean tanker index MR-TCE LPG 1 BPOIL
rates rise for the TC2 (UK Continent-US Atlantic
This week: 809 This week: $12,221/day This week: $40,563/tonne This week: $46,714/tonne
Coast) route from W175 to W185 partly on the basis
Last week: 749 Last week: $11,254/day Last week: $42,719/tonne Last week: $46,714/tonne
of the long US holiday weekend. Tight tonnage should
keep rates fairly steady. [ Source: Baltic Exchange ]

ConTex Currency rate vs $

Container ship Timecharter Assessment �����
Last wk Last wk 3M 3M
��� high low high low
1 July 24 June Type ����
1,100teu 6,469 6,322 Euro 1.2612 1.2152 1.3692 1.1877
Type ����
��� Pound 1.5229 1.4874 1.5524 1.4231
1,700teu 7,871 7,645 ����� Type ����
2,500teu 12,174 11,778 ConTex �right scale� Yen 89.46 86.97 94.99 86.97
ConTex 543 532 ��� Real 1.8168 1.7684 1.9153 1.7205
Aus dollar 0.8779 0.8316 0.9389 0.8067
ConTex

����
Outlook: Despite some uncertainty triggered by Swiss franc 1.0944 1.0578 1.1731 1.0503
US �

���
weaker-than-expected US consumer confidence and
slowing growth rates in purchasing activity, smaller ����
Outlook: The US dollar weakened last week as the
��� euro made gains after investors gained confidence
and medium-sized cellular tonnage saw further rate
in the region following the end of the one-year loan
improvements. CV1100 types are now fixing at $7,000/
facility. Economic data is slightly quieter this week. The
day in Asia while the more flexible B170’s (1,700teu, ���� ���
Feb Mar Apr May Jun Jul main focus will be on Europe with both the
geared) can obtain well over $10,000/day in mixed
BoE and ECB rate decisions on Thursday.
breakbulk/container trades, brokers reported. The
Panamax market is quiet. [ Source: Hamburg Shipbrokers’ Association (VHSS) ] [ www.corporate-fx.co.uk/fairplay ]

    8 July 2010 www.fairplay.co.uk

 Bunker prices [ Source: Cockett Marine Oil Ltd. Tel: +44 1689 883400 ] Middle East 380cst 180cst Mdo Mgo
d Khor Fakkan 463.00
430.00 445.00
479.00 n/a 722.50
655.00
Latest mid-range prices listed in $ as at Monday 522July
Feb2010.
2010. d Aden 490.00
515.00 500.00
525.00 n/a 705.00
745.00
d=delivered, w=ex-wharf. Ports listed regionally clockwise from NE. d Jeddah 500.00
490.00 495.00
535.00 n/a 1,000.00
775.00
Europe 380cst 180cst Mdo Mgo d Suez 492.50
467.50 485.00
492.50 n/a 990.00
772.50
d St Petersburg 330.00
353.50 363.50
355.00 540.00
503.00 589.00
585.00 d Dammam 465.00
450.00 475.00
455.00 n/a 660.00
720.00
d Great Belt 413.00
476.00 500.00
438.00 606.00
632.50 651.00
677.50
d Hamburg 411.00
447.00 458.00
427.00 580.00
601.00 636.00
641.50 Asia 380cst 180cst Mdo Mgo
d Rotterdam 400.00
455.50 423.50
470.50 626.50
595.00 644.00
626.50 d Tokyo 509.00
499.00 506.50
516.00 662.50
705.00 n/a
d Antwerp 401.00
456.00 468.50
431.50 593.00
587.50 6226.50
640.00 d Sydney 590.00
572.50 600.00
572.50 n/a 800.00
797.50
d Le Havre 438.00
467.50 482.50
457.50 n/a 670.50
691.50 d Colombo 515.00
512.50 520.00
525.00 n/a 750.00
725.00
d Falmouth 496.00
450.00 480.00
518.00 708.00
712.50 708.00
712.50 d Singapore 470.00
423.50 485.00
433.50 612.50
652.50 617.500
652.50
d Hong Kong 482.50
442.50 495.00
452.50 662.50
647.50 662.50
655.00
Mediterranean 380cst 180cst Mdo Mgo d Kaohsiung 484.00
491.00 499.00
487.00 680.00
670.00 685.00
695.00
d Istanbul 485.50
442.50 501.00
463.50 n/a 690.00
695.00 d South Korea 448.50
492.00 504.00
462.50 682.50
677.50 690.00
677.50
d Piraeus 466.00
413.50 480.00
437.50 n/a 650.00
632.50
d Valletta 465.50
424.00 483.50
442.50 n/a 644.00
645.00 Americas 380cst 180cst Mdo Mgo
d Augusta 447.00
477.00 495.00
475.00 n/a 678.00
710.00 w New York 442.00
458.50 468.50
462.00 682.50
662.50 n/a
d Fos/lavera 460.00
483.50 538.00
518.00 n/a 678.00
707.00 w Houston 461.50
425.00 468.50
445.00 635.00
677.50 n/a
d Gibraltar 463.50
412.50 478.50
437.50 650.00
652.50 672.50
675.00 w Cristobal 445.00
470.00 504.00
475.00 701.50
737.50 n/a
w Venezuelan Ports 449.00
467.50 495.00
478.50 677.00
n/a 685.00
742.50
Africa 380cst 180cst Mdo Mgo d Rio De Janeiro 506.00
430.00 448.50
524.50 n/a 713.00
710.00
d Arzew 494.00
492.00 480.00
490.00 n/a 669.00
697.00 d Buenos Aires 472.50
513.50 541.00
492.50 795.00
702.50 822.50
717.50
d Durban n/a 440.00
512.50 657.50 667.50 d La Libertad 485.00
487.00 525.00
527.00 n/a 1,065.00
1,014.00
d Lagos 495.00
492.50 525.50
537.50 n/a 705.00
737.50 w Los Angeles 453.00
435.00 463.00
455.00 702.50
687.50 n/a
d Dakar 575.00
512.50 625.00
542.50 n/a 700.00
775.00 w Seattle 481.00
490.00 510.00
491.00 682.50
722.50 n/a
d Las Palmas 454.00
478.50 494.50
471.50 695.00
676.00 686.00
701.50 w Vancouver Bc 490.00
511.00 500.00
549.00 692.50
767.50 725.00
n/a

For online bunker information:www.fairplay.co.uk/secure/markets.aspx or visit www.bunkerworld.com or www.cockettgroup.com

Bunker outlook
Outlook: Bunkerworld index prices recently and IFO380 prices in Fujairah be a floor for oil prices this year, with
Major ports saw bunker prices move were at a $4/tonne premium on average markets balancing demand optimism
lower this week as optimism on crude BW380 cSt in June. against over-supply pessimism. For

$440
oil markets evaporated. The BW380 There were no reports of congestion bunker markets, oil prices below $70
index, for example, dropped $10/ or supply problems for Rotterdam this would pressure bunker prices to drop
tonne from last week. The decline in week. Prices were heading for the low below $400/tonne. But whether
bunker levels was also helped by some $400/tonne range across the week for prices will drop below this mark for a
weakening of fuel oil prices.  $10 IFO380 – levels not seen since late June sustained period remains to be seen as
Singapore reported strong product – and ended trading at $403. crude only traded in the $60 per barrel
availability but only average demand. BW180 cSt Houston this week saw prices range briefly this year.

$457
Combined with weaker fundamentals, move below June levels when IFO380 Bunker prices were quick to fall this
this allowed prices for IFO380 to fall averaged $428/tonne. By early trading week, and were helped by generally
across the week. Prices for the grade on Friday, prices were at $412. lower fuel oil resupply prices that were
were testing $450/tonne just over a By Thursday, crude oil futures had tracking the drop on crude markets. In
week ago but were down to $423 by the  $9 lost nearly $6 from levels around the short term bunker prices appear ready
end of the week. $78/barrel at the start of the week. to quickly move lower. If oil stays weak, it
Fujairah also posted lower values
BWDI distillate Market enthusiasm for global economic will be good news for bunker buyers.

$678
and prices were at $422 on Friday – just recovery appeared to be evaporating,
[ www.bunkerworld.com/prices ]
$1 lower than Singapore. Despite this but it was not yet clear whether prices
discount, Fujairah has been trading would drop below the pivotal $70 level.
slightly higher than its Asian competitor The $70/barrel mark appears to
 $12

www.fairplay.co.uk 8 July 2010    

To
Forget the very
online latest
bunker information
prices, on shipbuilding
visit www.fairplay.co.uk activity,
and subscribe
select the to the
‘Markets’ tabDaily
in the top menu
Newbuilding News
For bunker news andemail service. Visit
information, visitwww.ihsfairplay.com
www.lrfairplay.com ororemail
www.bunkerworld.com email
or www.cockettgroup.com
sales@lrfairplay.com
sales@lrfairplay.com

Newbuildings [ Source: Lloyds Register-Fairplay ]

Selected newbuilding orders reported week ending 2 july 2010

Shipbuilder No Owner/Operator Delivery Type Capacity
COSCO (Dalian) Shipyard 2 Common Progress 2011 Bulk carrier 57,000dwt
COSCO (Dalian) Shipyard 2 Gleamray Maritime 2012 Bulk carrier 79,500dwt
COSCO (Guangdong) Shipyard 3 Dynacom 2012 Bulk carrier 57,000dwt
Zhejiang Ouhua 2 Hellenic Carriers 2013 Bulk carrier 82,000dwt
Jiangsu Rongsheng 2 Frontline 2013 Crude oil tanker 156,900dwt
New Century 4 Dynacom 2012 Crude oil tanker 320,000dwt
Samsung HI 4 AET 2012 Crude oil tanker 158,000dwt
Samsung HI 3 NS Lemos 2011 Crude oil tanker 158,000dwt
Daewoo 2 Kuwait Petroleum 2012 Oil products tanker 110,000dwt
STX 4 Tanker Pacific 2012 Oil products tanker 74,500dwt
STX France 1 GNMTC Libya 2012 Passenger (cruise) ship 139,400gt

Selected deliveries reported week ending 2 july 2010

Vessel Shipbuilder Owner/Operator Delivery Type Capacity
Chang Shan Hai COSCO Dalian COSCO 2010/6 Bulk carrier 57,000dwt
Kambanos Hudong-Zhonghua Goulandris Brothers 2010/6 Bulk carrier 87,000dwt
TTM Phoenix IHI Ta-Tong Marine 2010/6 Bulk carrier 56,300dwt
Double Harmony Imabari KK Kyowa Sansho 2010/6 Bulk carrier 80,000dwt
Golden Shanghai Jinhai HI Golden Ocean Group 2010/6 Bulk carrier 175,861dwt
Mighty Sky Universal Mitsubishi 2010/6 Bulk carrier 81,200dwt
Aquarosa Yangzhou Guoyu Falcon Rederi 2010/6 Bulk carrier 57,000dwt
Maersk Wolgast China Cido Shipping 2010/6 Container ship 1,700teu
San Francisco Bridge Koyo Shunzan Kaiun 2010/6 Container ship 6,350teu
Neermoor Wadan Yards MTW Briese Schiffahrts 2010/6 Container ship 1,698teu
Achilleas Universal Capital Maritime & Trading 2010/6 Crude oil tanker 298,300dwt

For full listings of newbuilding orders and deliveries:see www.fairplay.co.uk/secure/markets.aspx

Sale & purchase All details given in good faith but without guarantee

container and multi-purpose
Hansa Sonderburg (container ship) ex-CP Kestrel:
sold by Hansa Treuhand Schiffsbeteiligungs, Germany,
to undisclosed interests, $16M. 2000. 23,577dwt,
18,335gt, 1,732teu. Built Binjiang Shipyard, MAN-
B&W/18kt.
Mekong Spirit (container ship) ex-MSC Biscay: sold by
Starlio Shipping Co Ltd, Cyprus, to undisclosed interests,
Italy, $7.4M. Last Sale: $23M (2006), 1996. 12,380dwt,
9,616gt, 1,042teu. Built Stocznia Szczecinska,
B&W/18kt.
Ocean Luck (general cargo ship) ex-Magdalena
Oldendorff: sold by Kaalbye Shipping International,
Ukraine, to undisclosed interests, $6.2M. 1983.
19,943dwt, 18,627gt, 576teu. Built Valmet, Sulzer/17kt.
Tara (container ship) ex-Nautic: sold by Seachange
Maritime, United States of America, to Technomar
Shipping, Greece, $17M. 1996. 38,400dwt, 31,207gt,
2,890teu. Built Kvaerner Warnow, B&W/23kt.
bulkers
Beilun Whale ex-Torm Marta: sold by Hong Kong
Whale Shipping Co, Hong Kong, to undisclosed interests,
$28M. 1997. 69,638dwt, 36,592gt. Built Tsuneishi Co,
B&W, 12,121bhp
Royal Forest: sold by Mitsubishi, Japan, to
undisclosed interests, $20.5M. 1998. 31,770
dwt, 19,731gt. Built The Hakodate Dock Co Ltd,
Mitsubishi/14kt.
Trenton ex-Capitano Giovanni: sold by OceanFreight
(OCNF), Greece, to undisclosed interests, Russia,
$26.1M. Last Sale: $40.5M (2007), 1995. 75,265dwt,
39,385gt. Built Fincantieri-Cant.
Nav. Italiani, Sulzer/16kt.
Xin Dong Guan 6 ex-Zhe Hai 509: sold by Dongguan
Haichang Shipping Co, China, to undisclosed interests,
China, $22.5M. 2008. 33,076dwt, 19,983gt. Built
Zhoushan Wuzhou Ship Repairing & Building Co,
Wartsila/14kt.
newbuilding resales
Amphitrite (crude oil tanker) ex-Daewoo 5313: sold
by Gulf Marine Management, Greece, to Minerva Marine,
Greece, $110M. 2010. 319,300dwt, 162,200gt. Built
Daewoo & Marine Engineering Co Ltd, Wartsila, 33,907bhp.
sold for demolition
Athos I (container ship) ex-Ever Guard: sold by
Technomar Shipping, Greece, $5.38M (375.00/ldt), 1983.
43,198dwt, 37,042gt, 2,728teu. Built Ishikawajima-
Harima HI Co (IHI), Sulzer, 21,601bhp/18kt.

For full listings of sale and purchase deals:see www.fairplay.co.uk/secure./markets.aspx

    8 July 2010 www.fairplay.co.uk

 Maritime Research Inc. 499 Emston Rd
Parlin NJ 08859 USA
Phone: (732) 727-8040
To get the very latest information
• Fixture Reports via email on shipbuilding
• Spreadsheet, Database or PDF formats
activity,
• Historical data dating subscribe to the Daily
back to 1951
• Indexes and statistical analysis
Fax: (732) 727-0243
Email: mri499@aol.com
Newbuilding News email service. Visit www.lrfairplay.com or email sales@lrfairplay.com Website: www.maritime-research.com
Supplying the maritime industry with comprehensive and independant fixture information for over 50 years!

Fixtures [ Source: Maritime Research Inc ]

Dry Fixtures
Cargo Vessel From To Tonnes Date Rate Chart Terms
Coal Pioneer Atlantic, 98 Baltimore Ymuiden 70,000-10% Jul 10/20 16.25 Corus FIO;5DaysShinc
Coal Nyon, 99 Baltimore Tianjin 70,000-10% Jul 17/28 48.50 Cetragpa FIO;25,000tShinc/15000tShinc
Iron ore Chihiro, 97 Tubarao Qingdao 160,000-10% Jul 1/15 22.00 Vale FIO;ScLd/30,000t
Iron ore Cape Unity, 07 W Australia China 160,000-10% Jul 11/20 8.90 Oldendorff FIO;ScLd/30,000t
Iron ore Phenix, 90 Tubarao Qingdao 150,000-10% Jul 1/15 22.00 Arcelor-Mi FIO;ScLd/30,000t
Iron ore Iron Beauty, 01 Saldanha Bay China 150,000-10% Jul 2/10 17.25 Kumba FIO;85,000t/30,000t
Wheat Clipper Faith, 98 Houston Durban 25,000-5% Jul 1/10 56.00 Olam FIO;8,000t/6,000t

TimECharters
Consump Vessel From To Tonnes Date Rate Chart Terms
14.5k/58t Anangel Dynasty, 99 Del Off HayPoint Redel China 171,101 Jul 7/15 22,500 BHP-Billit TripOut+$550,000Bonus
14k/36t Epson Trader I, 09 Del Le Havre Redel CPasseroViaEgypt 82,331 Jun 29/30 22,500 Cargill USGulfRd
14k/34t Melite, 04 DelPassGibraltar Redel San Ciprian 76,436 Jul 5/7 28,000 Cobelfret PtKamsarRd;Relet
14k/34t Maritime Hareshio, 06 Del Pass Santos Redel Singapore/Japan 75,740 Jul 11/13 36,000 CNR TripOut+$700,000BB
14.7k/34.5t Genco Leader, 99 Del Gangavaram Redel Singapore/Japan 73,941 Jul 2/5 25,750 CNR ECSoAmRd
14k/31t Kronos, 96 Del Guangzhou Unrptd 73,301 Jul 1/5 25,000 Bunge 3-5MoTrdg
14k/31t Powerful, 94 Del Egypt Med Redel Egypt Med 70,833 Jun 28/30 26,000 EBC BlackSeaRd
14k/31t Mass Glory, 93 Del Inchon Redel Far East 69,555 Jul 28/30 20,500 Cargill NoPacRd
Unrptd Aqua Atlantic, 10 Del Japan Unrptd 56,000 Jul 1/5 23,000 Cargill 3-5MoTrdg
14k/30t Desert Hawk, 99 Del Lagos Redel FarEastViaECSoAm 50,327 Jul 2/3 31,500 WBC Trip out
Unrptd New Fantasy, 96 Del Nemrut Bay Redel E Mediterranean 45,537 Jul 1/5 17,800 CNR TransAtlRd
13.5k/25t Blackfin, 95 Del Black Sea Redel PMuscatViaMEGulf 43,171 Jul 1/2 32,000 CNR Trip out
Unrptd East Ambition, 00 Del CJK Unrptd 28,378 Jul 10/15 17,500 PanOcean 4-6MoTrdg

Wet fixtures
Cargo Vessel From To Tonnes Date Rate Chart Terms
Oil dirty New Vitality, 93 ME Gulf So Korea 270,000 Jul 09 W82 Caltex
Oil dirty Sahba, 09 ME Gulf China 265,000 Jul 10 W87 Unipec Part cargo
Oil dirty Sunrise Jewel, 92 Basrah WC India 262,000 Jul 12 W101 IOC
Oil dirty Astipalaia, 01 W Africa WC India 260,000 Jul 27 4,025,000 IOC PtC;Lump Sum
Oil dirty Jag Lok, 05 Novorossiysk UK/Cont op USAtlUSGulf 140,000 Jul 14 W87\op W80 Clearlake
Oil dirty Genmar St.Nikolas, 08 Black Sea UK/Continent Med 135,000 Jul 06 W105 Clearlake
Oil dirty Donat, 07 Brazil USGulf 130,000 Jul 13 W80 Petrobras
Oil dirty Hellesp Trooper, 96 W Africa USGulf 130,000 Jul 25 W95 Vitol
Oil dirty Trirasa, 91 Kharg Island Cochin 130,000 Jul 19 W86 BPCL
Oil dirty Eagle Sibu, 99 Baltic USAtlantic USGulf 100,000 Jul 08 W97 Litasco
Oil dirty Minerva Gloria, 09 Tallinn USGulf 100,000 Jul 03 W97 Koch
Oil dirty Sea Voyager, 09 Kozmino So Korea 100,000 Jul 15 500,000 Gazprom Lump Sum
Oil dirty CE-Merapi, 96 CPC Mediterranean 80,000 Jul 09 W120 ST Shipp Part cargo
Oil dirty New Amity, 98 Bayu Undan Yosu 80,000 Jul 07 W107 Caltex Part cargo
Oil dirty Baltic Galaxy, 09 Australia Jamnagar 80,000 Jul 09 W89.75 Reliance Part cargo
Oil dirty Sanandaj, 99 Seria Mumbai 66,000 Jul 11 W92 BPCL Part cargo
Oil clean Ocean Explorer, 09 ME Gulf Japan 75,000 Jul 09 W110 CNR Part cargo
Oil clean Atlantic Aquarius, 08 St John USAtlantic 38,000 Jun 28 275,000 IrvingOil Lump Sum
Oil clean Ionian Wave, 09 USGulf UK/Continent Med 38,000 Jul 06 W97 CNR Part cargo
Oil clean Torm Cecilie, 01 UK/Continent USAtlantic 37,000 Jul 06 W170 Chevron
Oil clean CSC Auspicious, 08 WC India Japan 35,000 Jul 04 W120 Shell
Oil clean Citrus, 08 UK/Continent W Africa 33,000 Jul 05 W190 CNR Part cargo
Oil clean Angelina Amoretti,04 Baltic USAtlantic 22,000 Jul 06 W187\ Litasco
For more information on fixtures see: www.fairplay.co.uk/secure/markets.aspx

www.fairplay.co.uk 8 July 2010    

For trade and commerce news around the clock: www.fairplay.co.uk
Asia-Africa potential: Sturrock Shipping expands Building dry bulk: ACM moves into Australia Stolt-Nielsen:
cautious on profits rise Protests at Piraeus: tourism hit Arctic opportunities: assessing environmental impact
DnB NOR wins major boost
to China business
DnB NOR’s ability to
lend to Chinese owners
in renminbi will open a
potential treasure trove.
Hal Brown reports
DnB NOR, the Scandinavian bank,
has seriously bolstered its posi-
tion in China by gaining a licence
to finance shipping customers in
China in renminbi.
The licence means DnB NOR
should be able to attract more
Chinese customers, in particular
state-run shipping lines such as
Cosco and Nanjing Tanker Corp,
because about 95% of all China’s
domestic ship finance is carried
out in renminbi. The move, if
it proves successful, could spur
other banks to take the plunge
and follow DnB NOR’s lead by
jumping into the China market
with both feet.
DnB NOR’s licence comes
at an auspicious time: China is
undergoing a major expansion and
renewal of its domestic fleet. The
ability to lend in renminbi rather
than dollars pushes forward DnB
NOR’s strategy to expand and
strengthen its foothold in China
at an even faster rate.
The bank has been working
    8 July 2010
“go after business we were not
able to” previously, he explained.
By maneouvering into a posi-
tion to do business with Chinese-
flagged vessels whose owners only
want to borrow in the national
currency, DnB NOR believes it has
put itself ahead of its competitors.
DnB’s show of strength
Generating more business
DnB NOR ranks eighth in the list of top 10 shipping banks. It has a network of “Having accepted the Chinese
27 branches and representative offices across northern Europe, the US, China, flag, we’re more geared up to do
India and Singapore. In November 2009, shareholders approved a NKr14Bn business,” said Chiang. The licence
($2.49Bn) rights issue – a major relief for the bank’s shipping customers. will “lead to quicker deals”, he
“We can be perceived by our shipping customers as a stronger bank, which added, freeing up the bank to
is better equipped to support them,” DnB’s investor relations VP, Per Sagbak- concentrate on generating more
ken, told Fairplay at the time. business with other owners.
World’s top 10 shipping banks* About 95% of all
China’s domestic
Rank Name Total exposure Market share ship finance is
1 Royal Bank of Scotland $13.3Bn 19.85% carried out in
2 HSH Nordbank $5.2Bn 7.76% renminbi [ Photo:
3 Deutsche Schiffsbank $4.9Bn 7.41% Jim Wilson ]
4 Credit Suisse $4.0Bn 5.97%
5 National Bank of Greece $3.2Bn 4.80% As DnB NOR pushes through its
6 Alpha Bank $2.7Bn 3.99% strategy of increasing lending to
7 Emporiki Bank of Greece $2.6Bn 3.91% Chinese owners, the bank is also
8 DNB NOR $2.5Bn 3.80% keeping an eye on market devel-
9 Marfin Egnatia $2.4Bn 3.66% opments in China that are driving
10 Calyon (estimated) $2.0Bn 2.98% the shipping industry forward.
Total $43Bn 64.13% Torbjorn Kjus, an analyst
from DnB NOR Markets, told
*Ranked by portfolio size as at 31 December 2009 [ Source: Petrofin Bank Research ] a conference in Oslo at the end
of May that Chinese car sales,
which “exploded” over the past
towards gaining the licence since DnB NOR’s head of Asia. few years (including a large rise
it opened an office in Shanghai in “China is such a large market,” in exports), will boost oil demand
the autumn of 2006. The licence he told Fairplay, “and without further, leading to more business
means the bank can lend to own- a licence we were not able to for tankers – and also more oppor-
ers with China-flagged vessels – a attack it.” DnB NOR already has a tunities for DnB NOR to lend
“significant” development for the strong presence in China, but the to owners eager to expand their
bank, according to Andrew Chiang, new licence means the bank can tanker fleets.  F
www.fairplay.co.uk
 trade & commerce

[ Photo: iStockphoto ]

Hiccup in the Black Sea wine trade

Moldovan wine exports
shipped to Russia are
slowing thanks to a
crackdown that may be
politically motivated
Gennady Onishchenko, the chief
the source told Fairplay. The
source said the society has a
“strong feeling” that the previ-
ous ban against Moldovan wine
did not affect Russia’s consumer
market because the wine was
reaching the market all the
same, through third countries
and “with dubious schemes”. In
concentrate. Another shipment
Wine war had been relieved of 47,000
litres earlier in the same month,
spills over he said.
Mihai Ghimpu, acting Moldo-
van president, is believed to be
the reason for the new Russian
issues over Moldovan wine.
That is because Ghimpu has

of Russia’s Consumer Protection
Agency and overseer of all food-
stuff imports, is coming down hard
on wine shipped from Moldova – a
move that has spurred his critics
into accusing him of performing
his job in order to line his pockets
and play politics, rather than
genuinely protect Russians from
unsafe food.
Previous moves by Onish-
chenko have included saving
Russians from the perils of
Belarus milk last June (reported
by Fairplay), and then in January
he stepped in to reject American
chicken and pork.
Onishchenko’s latest target is a
low price red wine from Moldova.
fact, the previous restriction
only led to a rise in wine prices,
“and we believe that if another
ban is introduced, these
schemes will be revived,”
added the source.
Moves against Moldova
More than 30 Moldovan enter-
prises ship wine to Russia, and it
is the country’s principal export
to Russia.
In fact, Moldovan wine has
been the market leader in Russia
– one bottle out of every two
drunk in Russia is from Mol-
dova. At least, that was when
Onishchenko wasn’t involved.
Onishchenko’s agency was
30%
Drop in Russian imports of Moldovan
wine from 2005 to 2006 as ‘wine
war’ was at its height
mobilised anti-communist
and anti-Russian support
with the announcement of
28 June as a “Day of Soviet
Occupation”. Onishchenko,
however, has said his
crackdown was not linked to
Ghimpu’s actions
Steps forward
The Moldovan vice-minister for
agriculture and food industry,
Vasily Bumakov, said he was
negotiating with Onishchenko
to recognise quality certificates
issued by a laboratory in Chi-
sinau, the Moldovan capital.
He also said that Onishchenko
wasn’t in a hurry to agree, but

According to a notice posted on
29 June by the Federal Consumer
Protection Agency (Rospotreb-
nadzor), which Onishchenko
heads, a recent inspection
revealed something “not meet-
ing the requirements of safety”.
The exact nature of the breach
wasn’t set out in the notice;
the only information provided
was that it was a violation of
the agency’s regulation San-
PiN2.3.2.1078-01. Onishchen-
ko’s spokesman, Lyubov
Voropayeva, declined to provide
more details on when the inspec-
tion took place and what was
wrong with the wine.
A spokesman for the Con-
sumer Rights Protection Society
said it isn’t sure of the motive. “I
cannot comment on the quality
and composition of the wine
inspected by Rospotrebnadzor,”
responsible for the cutbacks,
which saw Russian imports of
Moldovan wine drop 30%
from 2005 to 2006. This was
followed by another 16%
reduction in 2008.
The problems started in
March 2006 when Russia
banned Moldovan imports,
claiming pesticides and heavy
metal traces had been detected.
Then in the second half of
2007, it was officially decided
that deliveries from Moldova
could resume. In July 2009, all
restrictions on Moldovan wine
were lifted. And now, doubts
over safety have been revisited,
at a time when Moldovan wine
volumes rose and market share
picked up.
On 26 April, Onishchenko
said his organisation had seized
a 50,000 litre shipment of wine
16%
proposed a “phased solution”
to laboratory certification.
Vadim Drobiz, head of
the Center for Research
on Federal and Regional
Markets for Alcohol, has told
Fairplay that Onishchenko
has met representatives from
the Association of Alcohol Mar-
ket Participants of the Russian
Federation (AURA) and promised
Drop in Russian imports of Moldovan that he would not use his inspec-
wine in 2008 tion powers for political reasons.
He also told AURA that Moldo-
‘We believe if van winemakers had to comply
with Russian quality standards,
another ban is but he did not commit himself
introduced, to an agreed laboratory certifi-
cation process. “We should be
these dubious impartial,” said Drobiz. “Before
schemes will accusing Onishchenko of politi-
cal games, the [latest] seized
be revived’ shipment should be analysed by
an independent laboratory.” F

www.fairplay.co.uk 8 July 2010 17

trade & commerce
Wizard of Oz
Sturrock’s expansion into
Australia opens up Asia-
Africa business potential
Sturrock Shipping’s move into
Australia has positioned the South
African company to strengthen
itself in Africa as it seeks to increase
its footprint across the continent.
In May, Sturrock surprised
many with the acquisition of the
entire share capital in Meware,
the holding company for four
Australian ship agency businesses
– Hetherington Kingsbury Ship-
ping Agency, McArthur Shipping &
Agency, Pacific Shipping Agencies
and West Coast Shipping Agencies.
Timeline: ACM Shipping
ACM Shipping founded, focuses on
tanker spot and timecharter business
1982 2001
Acquired S&P desk from Seascope
(JV); fully merged in 2008
ACM boosts Asia presence by buying Aussie business
New acquisitions are an
opportunity to build
dry bulk business
ACM Shipping, the London
shipbroker, has returned to
the acquisition business after a
two-year absence by taking over
Endeavour Shipbrokers – the
Australian dry cargo broker with
offices in Melbourne and Sydney
– for £5.8M ($8.2M). ACM will pay
39% of the purchase price in cash
 8 July 2010
Until now Sturrock has not
ventured much beyond South
and East Africa. In the latter the
Cape Town-based company has
acquired agencies in Mozambique,
Tanzania, Kenya, Madagascar and
the Sudan. But Sturrock Shipping,
which was founded in 1969, has
made little secret of its intention
to expand into West Africa.
The company began this move
with an agency in Luanda, Angola,
in 2008. Since then it has been
casting around for opportunities
in Namibia, Equatorial Guinea, Sao
Tome, Gabon and Ghana. “Even
the big prize of Nigeria is on our
horizon,” MD Andrew Sturrock
told Fairplay.
Acquired FFA desk through JV
with NASDAQ-listed GFI Group
2002 2004
Launched research
service
and the rest in new shares, which
will also be listed on the AIM list of
the London Stock Exchange.
ACM chairman Peter Sechiari
said the move diversifies ACM’s
earnings and builds on the group’s
significant expertise in shipbrok-
ing. The acquisition is expected
to become “earnings enhancing”
within the first year, he said.
ACM finance chief Ian Hartley
told Fairplay: “The UK remains
vitally important for us, but we
have had a lot of expansion in
$5.9M
(maximum) paid by Sturrock for
establishing a strong presence in
the Australian and Asian markets
Which begs the question: why
did he suddenly move in the
opposite direction into Australia?
“Sturrock Shipping is largely
Opened Singapore Opened India office
office and started Gas desk
2005 2006
Listed on London’s
AIM market
the Far East and the Asia Pacific
region.” The acquisition of Endea-
vour will increase the company’s
presence in that part of the world
and strengthen its foothold in the
dry bulk sector.
“In the foreseeable future, dry
bulk will receive a lot of attention
as it is a big sector and our presence
there is still quite small,” Hartley
continued. Further acquisitions
in this sector are possible, but the
main focus of the expansion of this
business will come through organic
a tanker agency but we’d like to
strengthen our position with
the dry bulk business,” explained
Sturrock. “We’re doing this
Opened
Shanghai office
2007 2008
Acquired small/specialised
tanker desk by purchasing H&D
growth, in which the main office in
London will play a central role.
The group’s strategy is to gain
market share by expanding its
team of brokers into new shipping
sectors and to penetrate new
regional markets. ACM says that by
building on the group’s expertise
and significant infrastructure,
ACM is working towards becoming
an integrated shipbroking service
provider. “This is being achieved
both organically and through
acquisition,” ACM said. F
www.fairplay.co.uk
 trade & commerce

Australian agencies that we’ve

acquired are 80% dry cargo and
20% tanker – the direct opposite
of South Africa’s agencies. But
the real issue for us is that the
‘Even the Australian companies have excel-
lent ties with Asia, and Asia is
big prize of expanding strongly into Africa. We
Nigeria is on see increasing Asian activity into
the [African] continent and this
our horizon’ therefore presents a springboard
for us in both directions.”
Sturrock MD Andrew Sturrock A better fit
[ Source: Terry Hutson ] Several of Meware’s shareholders
wanted to sell and when Michael
Phillips, MD of Hetherington
Kingsbury and McArthur Ship-
ping, visited South Africa for
already in East Africa and we’re the FONASBA conference, the
keen to expand further in the dry opportunity presented itself to
bulk markets.” explore options. Other groups like
He pointed out: “Now the Inchcape were also prospecting,
‘Increasing Asian activity into
Africa presents a springboard
for us in both directions’
but the feeling was that Sturrock
would be a better fit, owing to the
Australian group’s historic ties
with Asia – particularly Japan.
There were also concerns over
staffing, but with Sturrock’s
assurance that no changes would
be necessary the deal was struck.
Andrew Sturrock declined to say
how much his company paid for
establishing a strong presence
in the Australian and Asian
markets, but admitted it was
“somewhere between R25M and
R45M”($5.9M).
Sturrock said that, in several
respects, the export-driven Aus-
tralian economy mirrors that
of South Africa, although it is
much stronger.
“But whereas countries like
Brazil and Australia have added to
their GDPs with strong exports
of raw materials, in South Africa
we missed the boat due to a lack
of infrastructure at ports such
as Richards Bay. Having a strong
stake in Australia therefore gives
Sturrock Shipping a hedge here
in South Africa,” he said.
Sturrock said that he’d be look-
ing to raising the tanker ratio in
Australia and dry cargo business
in South Africa. F

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www.fairplay.co.uk 8 July 2010 

trade & commerce

Stolt-Nielsen cautious on profits rise

Stolt-Nielsen had a
decent first half but
issues over China and a
newbuilding refund are
looming large
the strength of the global eco-
nomic recovery, and any growth
will be modest in the coming
years. Interesting opportunities
will crop up later in the year, but
for the time being “we are keeping
our powder dry,” he added.
traditional Chinese markets are
buying less, China in turn becomes
more dependent on its domestic
demand, which will take some
time to develop. “Therefore we
‘We are repeat our concerns about the mar-
keeping our ket fundamentals going forward,”
Stolt-Nielsen warned.
powder dry’ Another issue that impacts on
the balance sheet is its newbuild-

Norwegian tanker specialist
Stolt-Nielsen has reported a rise in
1H10 profits year-on-year, mainly
due to more operating days and the
Less bright spots on the balance
sheet highlight the fragile recov-
ery: Stolt-Nielsen Gas reported
losses of $2.6M in 2Q10, due to
the weakness in the VLGC market,
$46.3M
ing order of eight large parcel tank-
ers at SLS in Korea that will not be
built. Stolt is embroiled in negotia-
profits for 1H10 tions with the yard and banks to
recover payments of $296M, plus

sale of ships.
Profits reached $46.3M, up from
$42.1M in 1H09. The rise in prof-
its for subsidiary Stolt Tank Con-
tainers was driven by a “healthy
demand” in global markets, the
company said.
Despite the group’s decent
results, Stolt remains cautious.
Niels Stolt-Nielsen, CEO of the
group, said he is concerned about
and Stolthaven Terminals reported
2Q10 operating profits of $13.6M,
down from $15.5M in 1Q10.
Niels Stolt-Nielsen’s suspicion of
early economic recovery was raised
in April. He warned that Beijing’s
gradual phasing out of economic
stimulus measures is likely to put
the brakes on China’s economy
– which will have implications for
international shipping.
$296M
payments for eight parcel tankers
Stolt-Nielsen is trying to get refunded
“We question the sustain-
ability of the strong recovery in
China once the stimulus is cut
back,” he said at the time. As
interest, which are covered by
refund guarantees.
However, recovering refunds
is easier said than done. “Refund
guarantees are the financial cor-
nerstone of the shipbuilding con-
tract, but some owners find they
aren’t as all-embracing as they first
thought,” said Simon Curtis of law
firm Curtis Davis Garrard at a Lon-
don finance conference in May. F

Protests at Piraeus hit tourism

at Piraeus and was organised by

20%
Strikes hit Greece’s main Tourists unable to PAME (the All-Workers Militant
port as angry protesters board ferries at Piraeus Front). It was called to demand
[ Photo: P Aivatzidis ] changes to the ‘anti-social mea-
demand the rich pay up percentage of sures’ being imposed, according to
Greece’s GDP derived the Panhellenic Union of Mer-
Greek tourism has been hit hard from tourism chant Marine Engineers.

by a dock and ferry workers’
strike that prevented thousands
of holidaymakers from travelling
to the islands. At the same time,
protests against planned reforms
to pensions and labour laws took
place on the streets of Athens. Five
thousand angry marchers carried
banners bearing inflammatory
statements such as ‘Let the rich
pay for the crisis’.
It is yet to be seen how Greece’s
austerity measures might affect
shipping and owners in the long
term, but the immediate damage
caused by the strikes was palpable.
‘There are no
ships leaving
Piraeus port’
In Piraeus – Greece’s main port and
the gateway to the Aegean islands
– thousands of tourists were
prevented by union members from
boarding ferries.
Tourism generates almost 20%
of GDP – Greece’s economy hovers
at around the €240Bn ($294Bn)
10%
decline in ferry
bookings in Greece
this summer
mark – but bookings are report-
edly down by about 10%. “There
are no ships leaving Piraeus port,”
a coastguard official told Reuters
during the strike.
The 24-hour strike – the fifth
general strike this year – also
included maritime engineers
Directly affected by the strike
were eight scheduled sailings
to the popular Cyclades islands,
which include Mykonos and Paros,
and others to destinations in the
Saronic gulf. A ferry to Crete was
also cancelled. Strikes against the
austerity measures have also hit
airports, roads and railways.
A bright spot is that the Chinese
have signed a range of trade and
investment agreements, and Libya
wants to co-operate in energy,
tourism, food production, finance
and renewable energy – all sectors
that can involve shipping. F

 8 July 2010 www.fairplay.co.uk


Opening up the Arctic
Arctic traders are advised
to prepare for growth
in business and further
investigations into the
green impact
Arctic trade will require impact
assessments to determine
whether it can be sustained at
the required level of environ-
mental protection, scientists and
academics warned at the World
Ocean Council’s Sustainable
Ocean Summit last month.
The need to review Arctic trade
comes as activity is stepping
up. Seasonal retreat of sea ice in
both the Northern Sea Route and
Northwest Passage has encour-
aged shipowners to evaluate new
polar routes.
The Arctic Marine Shipping
Assessment (AMSA) published
last year by the Arctic Council
found that traffic was even
higher than it thought.
However, port facilities, search
and rescue resources and regula-
tion – both at Arctic Council and
IMO levels – must be improved
if future levels of ship traffic
are to be permitted in the area,
according to Malcolm Lowings
of Golder Associates, a specialist
engineering contractor.
“There is a lot of posturing
and positioning going on and a
great many national interest and
defence considerations, but we
are moving towards diminished
ice cover in the summer which
Ship management at its best
Tel: +41 22 301 11 12 Fax: +41 22 301 04 44 Email: doris@doris.ch Web: www.doris.ch
www.fairplay.co.uk
For more information trade & commerce
on the World Ocean Council, see:
www.oceancouncil.org
auctioned oil and gas rights
and has a number of
large scale minerals
projects planned or
underway. These
Seasonal retreat of sea ice in both the Northern include a project
Sea Route and Northwest Passage has opened up at the southwest
new polar routes for ships [ Photo: Arctic Marine of the island,
Shipping Assessment by the Arctic Council ] where an alu-
150
minium smelter
maximum number with capacity of
of Capesize voyages a 400,000 tonnes/
year through Greenland’s year is currently
waters carrying iron ore from under development
the new Baffin Island project by Alcoa.
“That will comprise large
numbers of ship movements
‘We are moving towards and the government is woefully
diminished ice cover which will unprepared for the kind of traffic
it will see along its coasts,” Low-
make the Northern Sea Route ings said.
and Northwest Passage viable… Improvements to safety
we should pay attention and be He noted that “another project
is the Mary River iron deposit
cautious at same time’ being developed on Baffin Island.
What is significant there is size
of development.”
will make the Northern Sea require conducting scenario stud- The scale of the project is
Route and Northwest Passage ies to model projected traffic, and indeed impressive: developer
viable. This is something we setting that against the demands Baffinland is proposing a mine
should pay attention to and be for more stringent environmen- producing 18M tonnes/year,
cautious about at same time,” tal protection. “One of the nice rising to 30M tonnes/year, of
Lowings said. things about being behind is very high quality (up to 68% Fe
James Corbett of the Univer- it’s easier to catch up because content) iron ore.
sity of Delaware, best known you have a roadmap,” Corbett “Assuming the use of
for his research suggesting that pointed out. 135,000dwt Capesize ships, that
shipping’s SOx emissions could But if that observation is taken means between 100 and 150
be responsible for 60,000 deaths to mean that green laws will voyages a year, all of which will
a year, said there were “concrete constrain Arctic shipping, there take place through Greenland’s
expectations that the recommen- is little sign of this so far. For waters,” Lowings pointed out.
dations of the report would be example, Greenland’s shipping “The government is not pre-
enacted by members of the Arctic activity was increasing in cruise, pared for that volume and a lot
Council,” and development offshore, tanker and dry bulk sec- of improvements to safety and
would be tightly monitored. tors, said Lowings. navigation services will need to
Monitoring Arctic trade and Since gaining autonomy be made before it can happen,”
its environmental impact would from Denmark, Greenland has he concluded. F
DORIS & NAESS
with offices in Amsterdam, Geneva, Manila, New York
For further details contact Nicolas Wirth at Doris Geneva
8 July 2010 21
trade & commerce
German owners pin hopes
on Asian banks
Reshuffling the German
state bank sector may
open up some strategic
opportunities for Asian
ship financiers
German banks are undergoing
a major overhaul, leading some
commentators to suggest there is
a need for fresh input from new
Asian shareholders.
HSH Nordbank is one of the
world’s largest shipping banks and
its dominant public sharehold-
ers, the states of Hamburg and
Schleswig-Holstein, must sell their
shareholdings, probably by 2014,
in return for a billion euro bail-out
last year. The European Commis-
sion tied its approval of state aid
to an exit of the German states.
HSH would have faced bankruptcy
without the support of Hamburg
and Schleswig-Holstein.
The bank is also seeking to slash
Eitzen shifts its focus to ship supplies
Eitzen Maritime Services
sees opportunities for its
ship supplies business as
a much better bet than
ship management
Norway’s Eitzen Maritime Ser-
vices has sold its ship management
business in order to focus on its
buoyant ship supplies operation.
The sale to Bermuda’s Sanary
for NKr 24M ($3.7M) followed
Eitzen’s restructuring of its
ship management division over
the past two years, but it was
    8 July 2010
its shipping exposure in line with
a general reduction of its balance
sheet – a move that has caused
alarm among many domestic ship-
owners. Some €8Bn in shipping
loans has already been earmarked
for sale or syndication. “There
is a fear that German banks will
not be offering sufficient support
when owners move to renew their
fleets after the crisis,” warned
Thomas Rehder, managing owner
of shipowning and brokering firm
Carsten Rehder.
Speaking in Hamburg last week,
Rehder argued that HSH Nordbank
should invite large Asian banks
with strong ship finance activities
to become strategic shareholders.
They ought to fill the void left by
the state shareholders and guar-
antee the continuation of strong
ship finance activities, Rehder
said. “Why shouldn’t we encourage
Asian banks to become active as
[HSH Nordbank] shareholders?”
he asked.
not enough to prevent reduced
volumes and margin pressure in
2009 and 2010. The focus on a
healthy ship supply service, fol-
lowing acquisitions in Europe and
the Middle East, finally persuaded
Eitzen to take the plunge and sell-
off its ship management opera-
tions completely.
“We are pleased we have
succeeded in passing our ship
management operation on to new
and professional owners,” said
Annette Malm Justad, CEO of
Eitzen Maritime Services.
The move also comes hard on
the heels of the sale in June of
€8Bn
amount in shipping loans already
earmarked for sale or syndication
by German banks
959
ships in acute need of fresh
liquidity, according to a survey
carried out by the German
Shipowners’ Association
Owners need finance
German shipowners need bank
financing both for their record
orderbook and for the operation
of existing ships that are laid up
or chartered out at loss-making
rates. Some 959 ships are in acute
need of fresh liquidity, according
to a survey by the German Ship-
owners’ Association VDR.
Eitzen Group’s bulk shipping
division to Chilean ship operator
Navieras Ultragas for $92.9M. Eit-
zen Group has made no secret of
its intention to sell-off parts of its
business to boost its bottom line
after a difficult 2009, when it was
forced into urgent debt work-outs
by its banks. Earlier this year, the
group was close to selling Camillo
Eitzen & Co to Indonesia’s tanker
company Berlian Laju Tankers,
but the Indonesians backed out.
As Eitzen bolsters its ship sup-
ply service, compatriot company
Wilhelmsen recently boosted
its own ship services division by
Growing numbers of domestic
owners are expected to put ships
up for sale, according to a new
study by accountants Pricewa-
terhouseCoopers. Some 26%
of all respondents in its latest
shipowner poll in Germany said
they will dispose of vessels over
the next 12 months, against only
18% of all respondents in a similar
survey last year.
Some owners may decide that
because of increasing ship values
the time is right for them to sell
older vessels to raise equity for
new projects. However, a pick-up
in vessel divestments should, in
part, be driven by the financing
banks because the recovery in
values allows them to recoup their
ship mortgage loans from the col-
laterals. “There are still a host of
problems with many newbuilding
projects and existing ships that
have not been solved,” commented
PwC partner Claus Brandt.
Some 55% of all participants in
the poll said that they need fresh
liquidity to cover shortfalls from
ship operations, and 58% said
they are still negotiating longer-
term financing arrangements
with the banks.  F
acquiring full ownership of its
ship services operation in Japan.
Wilhelmsen’s bold move
reflects its general confidence
about the performance of its
services business – a point high-
lighted by its price freeze on thou-
sands of its bestselling products,
benefiting more than 22,000
ships still striving to cut costs.
“We want to help out as much
as we can,” Wilhelmsen Ships
Service head of pricing Glenn
Davies told Fairplay. As the global
economy falters, ship supplies
then appears to be one sector that
continues to fare well.  F
www.fairplay.co.uk

Boulogne-sur-Mer port hub
garners growing interest
Investment in Boulogne’s
port is paying off as
growing demand for
freight and tourist traffic
entices operators
The port of Boulogne is benefit-
ing from last September’s open-
ing of the first phase of Hub Port
Boulogne and is set to attract
interest from ship owners and
operators eager to take advantage
of the development.
The hub project is part of a
€200M ($247M) investment
plan aimed at turning the port
into a major centre for shortsea
shipping. Currently, Channel
ferry operator LD Lines is the only
operator using the port.
Nick Stevens, spokesman for the
port, told Fairplay that there had
been no “cast iron commitment”
from other operators to ply their
trade at the port, but the success
of the hub project means other
operators have shown interest and
www.fairplay.co.uk
it is “inevitable” that even more
operators will now look closely
into how the port and the market
is developing. “The demand for
freight and tourist traffic is obvi-
ously there,” said Stevens.
The investment has resulted in
two new linkspans, as well as new
logistics and storage areas. Areas
for a rail link and fishing activities
have also been created, and LD
Lines has been able to introduce
a second vessel on its Dover-Bou-
logne service.
Stevens stressed that the invest-
ment was not made solely for
the benefit of LD Lines. Plans for
the hub existed about three years
before it was opened, he explained;
it is a “coincidence” that it came
into being as LD lines was building
up its business. He added that one
of the main aims of the invest-
ment project is to boost business
by creating a port that can accom-
modate any type of vessel “world-
wide”, be it cargo or passenger.
While the hub project was not
developed exclusively for LD
€200M
amount invested in a plan to turn
the port of Boulogne into a major
centre for shortsea shipping
Lines, it’s true that the operator’s
increased activity has boosted
Boulogne-sur-Mer’s fortunes. The
port is now back in competition
with neighbouring Calais as a
ferry port on the Dover Strait.
LD Lines has not turned its
attention from the strait, contrary
to the impression it might have
given when it went into partner-
ship with Transeuropa Ferries
between Ramsgate and Ostend.
Indeed, LD Lines’s introduc-
tion of a second vessel on its
Dover-Boulogne service dem-
onstrates that the opposite is
true, according to LD Lines MD
Christophe Santoni.
Vessel Norman Trader (formerly
Dawn Merchant) was brought
trade & commerce
in to join its sister ship, Norman
Bridge, on the line, taking the
number of daily sailings from
eight to 14. Santoni told Fairplay
the company had always intended
there should be a second vessel on
the line.
LD Lines has taken the vessel
on timecharter, which Santoni
said had the advantage of allowing
it to use its own personnel to pro-
vide onboard catering and other
services. “It means that, for our
clients, there are LD Lines person-
nel,” he said.
The company had been encour-
aged to introduce a second vessel
because of strong traffic growth
on the line, particularly in
freight. After operating the line
for several months as a fast ferry
service with the Norman Arrow,
LD Lines relaunched the line in
November 2009 as a conven-
tional ferry service.
At that time, it carried just
1,872 freight units but, in
March 2010, the total had risen
to 7,966 units. “We knew that
Boulogne was an attractive
destination for passengers,” said
Santoni. “Our freight results
show that it is also an attractive
destination for freight.”
There was no question of the
Dover-Boulogne service being
downgraded in favour of the
Ramsgate-Ostend line. “We don’t
want to give that impression,”
said Santoni. “For us, it is clear
that Boulogne and Belgium are
complementary.” The Ramsgate-
Ostend line attracted traffic from
the Benelux countries and central
and eastern Europe, he explained,
while the Boulogne-Dover line
drew its traffic essentially from
France and Spain.
As to where traffic growth on
the Boulogne-Dover line is coming
from, Santoni said that it was diffi-
cult to be sure but some traffic was
doubtless being attracted from
the company’s western Channel
competitors and some from lines
using neighbouring Calais.  F
8 July 2010    
For the safety aspects of regulations see Safety at Sea International: www.safetyatsea.net

America sets shipping sanction ‘trap’

Draconian US
sanctions targeting ‘It’s a trap for the
foreign shipping firms unwary, designed to
are now a reality, reports ensnare foreign
Greg Miller
companies’  Burce Paulsen
The hope of the international

shipping community was that a
UN Iran sanctions breakthrough
would deter the US Congress
from passing its own harsher leg-
islation. That hope was dashed on
24 June, when lawmakers passed
their final draft by near-unani-
mous consent.
President Obama signed the
bill into law 1 July, with sanc-
tions entering force immediately.
The Comprehensive Iran
Sanctions Act of 2010 penalises
foreign firms transporting
refined petroleum products to
Iran. Violators may be disbarred
from US dollar exchanges. “It’s
a trap for the unwary, designed
to ensnare foreign companies,”
Seward & Kissel partner Bruce
Paulsen warned Fairplay. “The
potential sanction – the inability
to deal in dollars – is so enormous
that it could put companies out
of business.”
US sanctions don’t just target
foreign shippers and vessel
owners and operators. They also
jeopardise service providers,
including brokers, financiers and
insurers. Sanctions will apply if
“fair market value of goods, ser-
vices, technology, information or
support” exceeds $1M/products
voyage to Iran or $5M annually.
$5M/year
limit of Iran products import support under the
US sanctions
Congress specifically targeted
insurance in the belief that if
coverage is pulled, the Iran trade
would collapse.
The P&I clubs’ conundrum is
that they don’t know where their
insured vessels sail so a new clause
has been inserted into the final
draft providing safe harbour for
insurers who “exercise due dili-
gence in establishing and enforc-
ing” prohibitions.
But what responsibilities do
P&I clubs bear to ‘enforce’ pro-
hibitions? “It seems like they’re
looking for more than just a
policy exclusion,” cautioned Wat-
son, Farley & Williams’ senior
associate Jane Freeberg-Sarma.
Whether this requires insurers to
review voyage records or monitor
AIS information is a “grey area”,
she said.
The new law creates similarly
alarming uncertainty for other
global maritime players. An earlier

Obama injects sanctions waiver clause

A key addition to the Comprehensive Iran Sanctions Act of 2010 was a special
waiver at the behest of the Obama administration. This allows a special exemp-
tion for “friends” of the administration.
If the administration determines that rules on petroleum-products imports
to Iran have been broken, sanctions can be waived if “the government with
primary jurisdiction over the person [firm] is closely co-operating with the US
in multilateral efforts [UN sanctions]” and the waiver is “vital to the national
security interests of the US”.
According to Watson, Farley & Williams’ senior associate Jane Freeberg-
Sarma: “That section is designed to put pressure on other countries to toe the
line on [UN] sanctions. But I don’t think it will let the Obama administration
turn a blind eye to gasoline imports to Iran. I think it’s going to be hard to get

    8 July 2010 www.fairplay.co.uk


draft threatened sanctions
against firms with “actual knowl-
edge” of violations, but the final
version extends to all entities
‘knowingly’ in violation, defined
as those who have “actual knowl-
edge or should have known” that
US rules were broken.
Consider the case of a vessel
on long-term time charter or
bareboat charter to an operator
who quietly transports gasoline
to Iran. Should an owner have
known his ship was violating
the US law, exposing him to
crippling dollar sanctions? Hol-
land & Knight partner James
Power believes it’s ludicrous
that owners ‘should have
known’ their ship was trans-
porting gasoline to Iran in the
case of a KG-financed tanker
owned by “three German doc-
tors, a dentist and a baker”.
Power believes shipping enti-
ties should not seek out addi-
tional voyage data beyond their
traditional purview. “Once you
find out about something, your
duty is heightened,” he argued.
Freeberg-Sarma disagreed.
“Because of the change in the
‘knowingly’ standard, own-
ers can’t just rely on a blanket
statement that they don’t know
where their ships are. Owners
now have a duty to inquire.”
She stressed to Fairplay that US
shipowners aren’t protected by
charter clauses alone in Cuba
sanctions prosecutions.
Paulsen confirmed there
have already been “dust-ups”
between owners and charterers
on Iran-bound cargo. New char-
that waiver and I think there are going to be a lot fewer waivers than the
language indicates there might be.”
According to Seward & Kissel partner Bruce Paulsen: “We’ll have to wait
to see if we get waivers for the politically favoured or if this thing really has
teeth, but if you’re a shipping company, then why would you take
the chance?”
www.fairplay.co.uk
ter agreements include clauses
mandating US sanctions adher-
ence, but “if you’re looking to
add language to a long-term
contract, there’s going to be a
negotiation”, said Paulsen.
Insurance issues
Owners-charterer disputes
might be a moot point if insur-
ers refuse to offer future cover.
“In a timecharter, the owner
provides the insurance. If the
charterer breaches the owner’s
insurance, that’s a breach of the
charter,” explained Freeberg-
Sarma. “Bareboat charterers
are generally required to use
insurance on terms acceptable
to owners, so getting [new] cov-
erage from Joe’s Insurance Shop
in downtown Tehran should not
be an option,” she added.
In general, it appears that
many larger maritime players
are pre-emptively forsaking the
Iranian products import trade.
The fear, however, is that inno-
cent firms will be implicated by
unwitting ties to those seeking
profit from constrained supply.
Power noted that traders
could create special-purpose
vehicles to charter product
tankers for single voyages,
after which that SPV is dis-
solved. “There is great concern
in the international shipping
community,” he confirmed.
Shipping clients aren’t plotting
ways around US sanctions, he
insisted. Rather, their concern
is “how can they be sure they
don’t get accused of violating
sanctions unknowingly?”   F
Emissions trading and
levies delayed
There is a risk of
regional regulation as
states seek funding
Carbon trading or bunker levies
cannot be enacted until the IMO’s
technical and operational mea-
sures have been proven accurate
and reliable, a leading academic
has predicted.
But in the meantime, the drift
towards regional regulation could
quicken as nations seek new
sources of funding, delegates
to the World Ocean Council’s
Sustainable Ocean Summit heard
in mid-June.
James Corbett, professor
of marine policy at Delaware
University, told Fairplay that the
shipping industry would be able
to resist paying for carbon emis-
sions for some time, but should
not assume the stay of execution
was indefinite.
“The industry will probably
resist anything related to the mar-
ket” until they are confident that
a trading system makes of sense.
“There can be no exchange until
you and I agree that this thing is
worth that much. That requires
most of the metrics that the EEDI
and EEOI are forging,” he said.
The Energy Efficiency Design
Index and Energy Efficiency Oper-
ational Index are key planks of the
IMO’s technical and operational
measures designed to measure
energy efficiency and encour-
age owners to take a commercial
approach. Beyond these lie mar-
ket-based measures (MBMs) – a
bunker levy or emissions trading
– and Corbett said the industry
should be under no illusions that a
market in carbon is coming.
“Will regulators give the indus-
try long enough? Absolutely. Will
they give the industry as long as
regulation
the industry asks for? No. Will
they give it longer than it needs
from environmental point of
view? Yes. It will be somewhere in
between those two,” he predicted.
Corbett added that robust
indices would act as a spur to
green investment, encouraging
hardware and software providers
to deliver systems and equipment
that would give owners the best
possible performance.
But there was also a warning at
the summit that, in the interim,
regulators might take the initia-
tive on MBMs as they sought
new sources of funding for ‘clean
development’ and lost faith if
the UNFCCC process failed to
deliver a significant agreement
or roadmap.
Judith Shapiro, policy assistant
at the Carbon Capture and Storage
Association, said governments
and groups were looking for ways
to incentivise the process and
were prepared to work with a dif-
ferent approach from that of the
lead agency.
“There are some interesting
developments going on to develop
more specific mechanisms, more
bilateral instruments that are
outside the UNFCCC process,”
she told Fairplay. “The UNFCCC
probably needs to go away and
have a re-think about how
it works and how the post-
Copenhagen scene looks.”
Given COP15’s inability to
deliver anything like a successor
to the Kyoto Protocol that could
work on a global level, she said it
could prove impossible to make
the Clean Development Mechan-
ism concept work as a universal
tool. At issue was that developing
nations felt they should receive
incentives to cut carbon emiss-
ions – hard to deliver under the
current model.  F
8 July 2010    
For in-depth coverage of technological innovations see Solutions: www.solutionsmagazine.co.uk
comment
Nutrients feed mixed messages on sewage
Nutrient content has been proposed as a new way to evaluate sewage discharge from ships. Dr Wei
Chen, head of R&D at Hamworthy Water Systems, questions the benefits for the marine environment
During the February meeting of the
IMO’s Marine Environment Protec-
tion Committee, Helsinki Commission
(HELCOM) administrations sought to
establish Special Areas for the preven-
tion of pollution by sewage, and to
designate the Baltic Sea as such. The
submission included nutrient reduction
for sewage discharged, such as 20mg/
�����
litre of nitrogen or 70% removal,������
from
passenger ships with capacity for as few
as 12 passengers��.
The annual nutrient input from
all sources to the Baltic Sea includes
736,720 tonnes of nitrogen, with an
allowable input of 601,720 tonnes – a
reduction target of 135,000 tonnes.
HELCOM estimated the total shipping
contribution to be 356 tonnes, while
industry calculated the cruise ship contri-
butions at some 74 tonnes. By contrast,
a major city like Helsinki discharges some
500 tonnes of nitrogen/year from its
state-of-the-art wastewater treatment
plant (WWTP).
HELCOM claimed that nutrient
discharges from ships are “concentrated
along the shipping routes��”��������������
and
�������������
“causing
serious effects locally���������������������
”��������������������
, but no scientific
evidence was provided to support this.
Nitrogen distributions from previous
studies contradict such a claim.
Marine water is in general defined as
“less nutrient sensitive area” under the
    8 July 2010
European Urban Wastewater Treatment
Directives (����������������������������
91/271/EEC)�����������������
. The Directives
do not require nitrogen removal for point
discharges from populations of less than
10,000 people.
Baltic countries have introduced nitro-
gen removal targets for discharges from
less than 10,000 people, which require
a 30% removal to be achieved by 2018.
Advanced waste treatment plants cur-
rently fitted on cruise ships, such as the
After the successful introduction
of MEPC 159(55) by IMO in 2010,
standards for ship discharge are
better than equivalent land-
based standards
Membrane Bio Reactor (MBR) systems
provided by Hamworthy, have already
achieved this future target set for smaller
local communities.
After the successful introduction of
MEPC 159(55) by IMO in 2010, the
standards for ship discharge are better
than the equivalent land-based stand-
ards. For example, hardly any of the
land-based WWTPs have faecal coliform
consents or a disinfection stage. While
millions of faecal coliforms are legally
discharged from the land-based WWTPs,
including those that serve the port
reception facilities (PRFs), shipboard
sewage treatment plants perform
much better.
HELCOM stated that five major PRFs
would address 80% of the ship waste-
water offloading requirement. Three of
these will be made ‘adequate’ by 2013.
However, no assessment was made of
the actual capacities and the perform-
ances of available WWTPs.
A hold-and-discharge policy by ship
operators would increase the fuel used to
carry thousands of tonnes of wastewater
up and down the Baltic Sea – counter to
undertakings given by the administra-
tions, and by IMO, to reduce carbon
emissions and greenhouse gases.
For suppliers who believe they have
developed a solution, with Hamworthy
being one of them, it is yet to be seen if
such efforts will be made obsolete by the
hold-and-discharge policy.
In order to assess technological
‘availability’, the specification must
define influent nutrient concentrations,
the inclusion of various greywater
streams as well as methodology for
assessing percentage removal limits. All
these are unique shipboard conditions
that require specific attention by the
marine regulators.
Science-based limits
While MEPC must review the issues
on scientific and legislative grounds, I
contend that existing proven sewage
treatment plants on board passenger
ships, type-approved to MEPC 159(55)
standards, are perfectly suited for con-
tinued operation in the Baltic Sea, even
when it is designated a Special Area.
Why should ship owners and opera-
tors have to switch off the shipboard
sewage treatment plants, carry
wastewater at the expense of natural
resources and carbon emissions, only to
discharge this to a shore receiving facil-
ity whose treatment plant offers similar,
or inferior, performance?
It is important to establish sci-
ence-based nitrogen limits based on
environmental needs and effectiveness,
with due consideration for their demands
on natural resources and carbon emis-
sions. Maritime regulators must first
demonstrate that their proposals will
yield tangible environmental benefit.  F
www.fairplay.co.uk

Wake up call for alarm systems
Keeping alert on the
bridge through planning
of purchasing
Under a rolling programme begin-
ning next July a new piece of kit
will be required on all vessels over
150gt. New and existing SOLAS
vessels will be obliged to install a
bridge navigational watch alarm
system (BNWAS) within three
years of the first deadline on 1
July 2011. Demand will be high
and cost is likely to reflect this.
It is not unusual for ships to
operate with just a single watch-
man on the bridge and although
the practice is permitted it has
been implicated in many acci-
dents and incidents. One such
involving a Danish-owned and
Bahamas-flagged vessel in 2005
was the catalyst for the Danish and
Bahamian delegations to the IMO
submitting a joint proposal for
Suited to the Baltic environment
Combining icebreaking,
oil spill response and
escort capabilities
The trend to combine support
functions in one vessel has been
taken a step further in the design
of the multi-purpose vessel to
be developed and built under a
co-operation agreement between
STX Finland, Aker Arctic Technol-
The world’s leading supplier of compressed air systems for marine use.
40-50 % energy saving with
The TMC Smart Air® Compressors consume 40-50% less energy,
saving energy costs and lowering CO2 emissions.
www.fairplay.co.uk
mandatory carriage and operating
requirements for an alarm system
on the bridge. By November 2008
the IMO had made the necessary
amendments to SOLAS, making a
BNWAS mandatory for ships.
The first to be affected will be
all vessels above 150gt con-
structed after 1 July 2011, which
must be equipped with a BNWAS
when put into operation. Exist-
ing passenger ships and all other
ships over 3,000gt follow on 1
July 2012, and existing ships over
500gt on 1 July 2013. Existing
vessels over 150gt must comply
by 1 July 2014.
Deadlines for BNWAS installation
1 July 2011 All newbuildings over 150gt
1 July 2012 Existing passenger and all other ships over 3,000gt
1 July 2013 Existing ships over 500gt
1 July 2014 Existing ships over 150gt
ogy, Southeast Trading, Sovcom-
flot and Rosmoport for operation
by Sovcomflot in the Gulf of
Finland and the Baltic Sea.
Incorporating Aker Arctic’s dou-
ble-acting technology that allows
it to break ice both ahead and
astern, the asymmetrically-hulled
vessel will also be able to break a
50m ice channel by proceeding
sideways astern and to collect
spilled oil in ice and heavy seas by
TMC Smart Air®
The capabilities required of a
BNWAS were laid down in the
IMO performance standards
contained in MSC 128(75). The
system must monitor the aware-
ness of the officer of the watch
(OOW) and automatically alert
the master or another qualified
OOW if for any reason the OOW
becomes incapable of performing
his duties. In addition to its pri-
mary role of ensuring the OOW is
alert and active, the BNWAS may
also provide him with a means of
calling for immediate assistance
should it be needed.
IMO rules state the BNWAS
proceeding sideways ahead. Other
functions include escort and
emergency towing, fire-fighting
and ecological monitoring.
This ability to operate ahead,
astern and obliquely sideways
derives from the asymmetrical
hull form and the choice of diesel-
electric propulsion with three
azimuthing thrusters (one in the
bow, one aft and one on the side
aft). Trial speed at full power in
www.tmc.no
technology
should be operational whenever
the ship’s heading or track control
system is engaged, unless inhib-
ited by the master. Some makers
have added other functions above
those required by the new rules.
The devices are not particularly
complex or likely to be high-cost
items (an IMO report in 2005
mentioned a price tag of around
$1,500) but for an operator with
a large fleet the total outlay will
not be insignificant. The last time
such a universal requirement to
install new equipment occurred
was the introduction of GMDSS.
Then, many operators waited
until the last moment to buy and
install systems and found that
suppliers had hiked prices know-
ing owners would be obliged to
pay or risk ships being prevented
from operating. With SMM not
far away, an alert owner may be
able to negotiate a discounted
rate for a fleet-wide installation
programme with one or other of
the suppliers anxious to capture a
share of the market.   F
deep calm water is 15kt. In ice
conditions, the 1,450dwt vessel
is able to proceed at around 6kt
in 60cm level ice both ahead and
astern and at 3kt in 1m thick
level ice. It is able to penetrate
ice ridges and to turn inside ridge
fields. Tank capacity for recovered
oil and chemicals is 1,500m3.
Completion is scheduled for the
2012-13 winter season. Sergey
Frank, general manager at Sov-
comflot, has indicated such a ves-
sel could be useful in the Barents
Sea and the Okhotsk Sea.   F
THE NO. 1 MARINE SCREW COMPRESSOR
8 July 2010    
Fairplay now looks at movement of cargo from manufacturer to customer (door-to-door)
Colombo’s ‘tracks’ to recovery
Sri Lanka’s post-civil war
economic revival is set to
lift the country’s logistics
infrastructure out of its
near-obsolete state
Project cargo, much of it in the
form of railway rolling stock and
components for the creation of
track infrastructure, is being
imported to Sri Lanka at a steady
rate. Following the end of the
country’s 30-year conflict in May
2009, growth is running at 7% so
far this year.
Peace is allowing Colombo to
rebuild and modernise its rail net-
work, which was either destroyed
by the war or rendered obsolete
over time. Logistics group GAC’s
Sri Lanka unit has already won
significant business in the railway
rebuilding project, transporting
15,000 tonnes of concrete sleep-
ers, steel girders and other equip-
ment to a variety of sites along
the country’s southern track. GAC
has also handled more than 500
containers shipped from India and
arranged their delivery, transport,
de-stuffing and stacking.
Several big projects are envis-
aged to re-connect impoverished
regions in the island’s north and
south, which have been convulsed
by three separate insurgencies in
the past 40 years.
Rail tracks to the north, the
main pre-war mode of transport,
were blown up by Tamil Tiger reb-
8 8 July 2010
I N D I A
it
S tra
lk Kankesanturai
Pa
Gulf of
Mannar
S R I
Colombo
L A N K A
Multimodal links are planned, to
handle a forecast five-fold
increase in rail’s share of freight
els 20 years ago, severing regular
contact between the Tamil and
Sinhalese communities. “Often,
mobility is the first casualty of
conflict,” said professor Amal
Kumarage, head of the transport
& logistics management depart-
ment of Moratuwa University.
Sri Lanka Railways now
accounts for only 6% of all pass-
enger journeys and 1% of goods
journeys. The national transport
policy has the aim of improving
7%
Sri Lanka’s current
economic growth rate
Trincomalee
Hambantota
the transport of passengers and
goods, better connecting indus-
trial and agricultural producers
with markets, and upgrading
logistics with a strategic shift
towards rail. A goal of the policy is
to increase rail’s share of passen-
ger and freight transport to 10%
and 5% respectively by 2016.
To that end, multimodal link-
ages are planned for the north
where the previous transport
infrastructure was either
destroyed or is now obsolete. The
port of Kankesanturai, at the
island’s northern tip in the Jaffna
peninsula, has been earmarked as
a logistics centre, along with the
nearby Palaly airport. A rail track
is to be re-laid towards Talaiman-
nar pier, on the northwestern tip,
and from here ferry services to
Dhanushkodi in India, disrupted
by war, are to be resumed.
Southern coastal tracks will be
upgraded and extended, increas-
ing train speed and volume of
passenger and goods transported
and connecting with the new
deepwater port of Hambantota
and a new international airport.
PP Wijesekera, general man-
ager of Sri Lanka Railways, said
reconstruction work is being
fast-tracked with aid from India
and China for both the northern
tracks and the upgrading and lay-
ing of new tracks in the south.
“We’re going to replace all
trains with new trains and
improve tracks to run fast trains.
And we already have a rail link
to Colombo port which can be
revived at minimal cost.” Sri
Lanka Railways has received 15
diesel multiple units (DMUs)
from China for suburban travel
and has ordered 20 DMUs from
India for long-distance transport.
The organisation has also ordered
15 oil wagons from Pakistan to
move petroleum products by
train, as storage tanks are located
near rail tracks or are linked to the
national rail network. F
www.fairplay.co.uk

Box rates continue to soar
Shippers are exasperated
by a pattern of short
notice box rate rises,
which is causing
planning headaches
Container freight rates are con-
tinuing to rise on firming demand
and carriers’ efforts to restore
profitability following heavy
2009 losses, but a shortage of
both notice and boxes is conspir-
ing against shippers.
“The rebound in spot container
freight rates has been phenom-
enal, as rates now substantially
exceed pre-crisis levels of about
$2,000/40ft box,” said Philip
Damas, editor of the Drewry Con-
tainer Freight Rate Insight report,
which contains the data.
Drewry, the UK-based con-
sultancy, said its weekly Hong
Kong-Los Angeles container rate
benchmark has hit $2,607/feu
– 19% higher than the previous
week and 182% higher than the
same week in 2009.
Gulf timetable could derail
Trans Saudi-Europe rail
network targets look
over-optimistic
An independent Middle East
think-tank has warned that the
timetable drawn up by Gulf Co-
operation Council (GCC) states
to build a regional rail network
by 2017 (Fairplay, 17 June, p28)
may be too optimistic.
“The project is the combination
of several national rail projects
that will need to be co-ordinated
by a committee at GCC level;
www.fairplay.co.uk
$2,607/feu
weekly Hong Kong-Los Angeles container rate benchmark
Chinese factories that make
containers are holding back
production in order to drive
up prices
Eastbound trans-Pacific freight
rates, under annual contracts
signed in May and June for the
2010/2011 season, were also
more than twice the previous low
levels of the 2009-10 season. “It’s
a mini container shipping boom,
ahead of the full recovery of the
real economy,” Damas added.
While freight rates rise,
shippers say they often receive
poor service. Some lines impose
a surcharge for late arrival of
container to dock, yet ships
themselves are often delayed,
such a committee still needs to
be established,” Eckart Woertz,
Program Manager Economics at
the Gulf Research Center in Dubai
told Fairplay. “In some GCC
member states, the exact track
alignment has not been decided
yet – Bahrain, Qatar – and while
planning is already advanced in
the case of the UAE, it is lag-
ging behind in other cases – for
example in Oman.”
When completed, the network
will cross the northern Saudi
desert and will eventually con-
nect to Europe via Jordan, Syria
according to Alan Robertson,
director of UK-based consultancy
Webster Robertson.
Lines rarely quote a rate for
more than three months ahead,
Robertson said, which is incon-
venient for shippers as they lack
visibility of their freight cost
beyond that period.
Shippers would prefer a model
whereby the earlier one booked,
the lower the freight rate charged,
something akin to that used in
the air freight sector, according to
Mike Harrison, director of Freight
and Turkey. At Istanbul, where
the two continents are joined,
work on the Marmaray rail tunnel
beneath the Bosporus Strait began
in May 2004 but archaeological
finds and other delays have meant
that the tunnel will not be ready
for use before autumn 2013 at
the earliest.
David Briginshaw, editor in
chief of International Railway
Journal, told Fairplay the success
of high-speed rail in Europe and
Asia had been one of the factors
behind the rail renaissance in the
Middle East. “In addition,” he
logistics & supply chain
Management Solutions, another
UK-based consultancy.
Shippers’ concerns are aggra-
vated by a continuing shortage of
containers. Factories that make
them in China are holding back
production in order to drive up
prices, Robertson told Fairplay.
“In the recession when the lines
were in cost-saving mode they
embarked on a process of stop-
ping positioning, hiring as much
kit as possible and stopped build-
ing new units. So the normal
momentum in a line – where
lines’ secure equipment to cover
their organic growth, replacing
worn out units and adding units
to account for any deterioration
in their container productivity
– slowed or stopped.”
“Now that there is an upturn,
there are units basically in the
wrong place at the wrong time,
containers that were sold as worn
out will not return to the fleet and
the China factories are deliber-
ately holding production back
in order to drive the box prices
up. There is also little capacity in
the leasing industry as they have
hardly any stock and are stuck
with the container factory prob-
lem,” Robertson concluded   F
said, “there are the environmen-
tal benefits of rail and the fact
that the engines can run on any
fuel that’s available if it’s electri-
fied. In many urban areas of the
Middle East, you can no longer
move large amounts of freight
by road, so that’s driving rail con-
struction in Saudi Arabia.”
Apart from oil, Saudi Arabia is
rich in other minerals that could
secure the kingdom’s future.
This was the original reason for
building a rail line to connect
phosphate and bauxite mines in
the northern Saudi desert region.
“The by-product is a passenger
and freight service up to the Jor-
danian border,” said Briginshaw.   F
8 July 2010    
words: Jim Wilson
picture: NASA
Star sailor
Cargo ships once sailed across the oceans
powered by sail. Now, similar techniques,
such as tacking, are being discussed to navi-
gate space – using solar sail power.
The technique is now being investigated
by such bodies as NASA in the US and the
Japan Aerospace Exploration Agency (JAXA).
In fact, the Japanese agency launched an
experimental solar sail vessel on 20 May
and says on its website that “a solar sail can
move forward without consuming pro-
pellant as long as it can generate enough
energy from sunlight.”
It adds that the idea is over 100 years
old but many technical hurdles have stood
in the way of realising it. Recently, how-
ever, JAXA believes it has overcome these
obstacles and launched IKAROS – Interplan-
etary Kite-craft Accelerated by Radiation
of the Sun. Its sail takes the form of a huge
square measuring 20m across its diagonal,
only 0.0075mm thick and made of poly-
imide resin.
At sea, of course, sails propel ships by
trapping airflow or by acting as aerofoils,
generating lift as they redirect airflow across
them. A solar sail works in much the same
way – although it obviously does not rely on
moving air in the vacuum of space.
Yet it can tap into the greatest power
www.fairplay.co.uk
shoes ships
‘Once a solar sail
starts moving, it can
go on forever’
Illustration of solar sail powered space craft
source in our solar system,
the sun, making use of
two powerful forces – radiation pressure
and solar winds. On Earth, of course, drag
and inertia render these useless as sources
of propulsion but, in space, there is no drag
to overcome, only the inertia of the vessel
at rest. This could mean that, over time, the
continuous pressure exerted by sunlight
against a solar sail could gradually acceler-
ate the spacecraft, eventually enabling it to
travel faster than a ship powered by even
the biggest chemically-fuelled space rockets.
“Because there’s no friction in space,” a
NASA statement notes, “once a solar sail
starts moving, it can go on forever. Indeed,
long after a rocket would run out of gas and
begin to coast, a solar sail ship could still be
accelerating, achieving speeds much faster
and covering distances far greater than any
rocket.” It puts this in perspective, pointing
out that the Voyager space probes have left
the solar system “but it’s taken more than
three decades to do it. A sail launched today
would probably catch up with them in a
single decade.”
Solar sails have an important similarity to
conventional sails, NASA points out. “Like
a marine sail, a solar sail could also bring
you home. You could use the solar sail to
tack your vessel making it travel against the
‘wind’, back to Earth.”
Today, there are two main problems that
prevent the extensive commercialisation
of space. First is the problem of getting off
the planet. This could be solved by using a
‘Space Elevator’ (Fairplay, 11 February 2010,
p25), which is designed to send masses of
material into space far more cheaply than is
possible today.
The second problem is moving people and
material through empty space but solar sail
technology would do away with these prob-
lems, its supporters believe. While the sun
shines, propulsion will be available wherever
the craft is in the solar system. Theoretically
the two technologies together could make
access to, and transport through, space
practically and commercially feasible.
It’s easy to imagine how they would work
together. Several solar sail propelled ships
could continuously travel back in a loop, at
an incredibly fast speed, between the Earth
and, say, the Moon. Passengers and freight
leaving the Earth, via the Space Elevator,
would wait on a space station in orbit.
When the next solar sail propelled ship
comes sweeping by, the people and the
freight could blast off from the station
aboard a conventional rocket to catch
up with the sailing ship and dock with
it, later detaching when it swept by the
Moon. The return journey would be much
the same and, in this way, the solar ship
would act much like a liner service for
containers or passengers. Perhaps that’s
one liner service for the likes of Maersk, MSC
or Hanjin to think about. F
8 July 2010 31
decision-makers

LAKSHMI VENKATACHALAM

The softer side of

bureaucracy Former Indian director-general of shipping, Lakshmi
Venkatachalam, tells Ramadas Rao how her overriding
concern is that over regulation and lack of flexibility
could stifle growth of the Indian economy

J
ahaz Bhavan (Ship Mansion), the
headquarters of the Directorate Gen-
eral of Shipping in Mumbai, is a model
of an Indian government bureaucracy
in motion. Like many bureaucracies, it
has often been accused of sluggishness
by frustrated investors – and successive
heads of the directorate have been known
to sympathise with shipping industry
concerns, rolling out policies to attempt to
ease their administrative burden.
Take the example of Lakshmi
Venkatachalam, who took over as director-
general in late 2008. “We need not
handicap the Indian industry,” she told
Fairplay, affirming her support for the
demand of Indian owners for flexibility in
crew recruitment policies. While trying to
remove what she feels is a misconception
that bureaucracy is all about imposing
controls, she agrees that owners have a
strong case for urging the removal of a
number of additional taxes, given that a
tonnage tax regime is already in place.
On the tricky issue of cabotage regula-
tions she commends former director-
general DT Joseph for maintaining a tight
balancing act aimed at serving the interests
of both national shipping and the trade.
She is emphatic, however, that the
overriding concern should be growth. “If
we lose that perspective we will not be
fair to any sector.” The Indian economy
is expanding and offering numerous op-
portunities for global players to come in
and participate in its growth. The poli-
cies being unveiled in shipping, port and
infrastructure are aimed at facilitating this
process, she observes.
India’s energy requirements alone offer
substantial cargo-carrying potential. As
much as 52,000MW of additional capacity
in the power sector to April 2012 will be
coal-based. Venkatachalam points out
that up to 10% of India’s coal requirement
is imported, amounting to almost 60M
tonnes annually. India also imports huge
quantities of crude oil, as 68% of domestic
oil consumption is met by imports – which
exceed 100M tonnes/year.
The growth story cannot be written
without integrating advances in technol-
ogy into the policy framework. In less
than two years of office as DG of Ship-
ping, Venkatachalam has pushed success-
fully for enhancing the efficiency of the
examination system by harnessing the
latest technology.
Her proposal for an online examination
system has been approved by the ministry
and a pilot project is to be implemented
soon in collaboration with a Bangalore IT
solutions provider, International Insti-
tute of Information Technology. This will
assist in developing a framework that
will streamline the whole approach and
process of conducting examinations for
certification of seafarers.
Bureaucrats are known to be hard
drivers and Venkatachalam does not
spare herself in the search for new ac-
complishments. Seven years after joining
the Indian Administrative Service in 1978
she relocated to the US to study for a
master’s degree in economics and busi-
ness administration. She now has three
degrees, the first of which is in literature,
from India’s Jadhavpur University.

Venkatachalam is emphatic that the

overriding concern should be growth
32 8 July 2010 www.fairplay.co.uk

[ Photo: Ravi Kamble ]
It was a choice between an academic
or administrative career. Her family was
constantly shifting – her late father was in
public service – and Venkatachalam recalls
that, if they had not moved in 1976 from
Calcutta (Kolkata), academia would have
been the choice. Following the relocation
to Bangalore she decided to use the transi-
tion period to study for the Indian Admin-
istrative Service (IAS). “I got through at the
first shot,” she said, and thus the family
tradition of public service was continued.
However, the attraction of academia
remained strong and, in a break from
the convention of public servants opting
for training programnes through gov-
ernment-sponsored scholarships, Ven-
katachalam went back to university after
seven years in public service to notch up
two more masters degrees.
“That was a paradigm shift,” she recalled
of her academic exploits in the US. “It sort
of put me on a new plane of thinking.
My whole attitude and perspective as an
administrator underwent a change.”
Upon her return, she did stints in the
ministries of steel and urban development
and enjoyed a long tenure as chairman of
the Coffee Board, which she terms as a
‘360 degree’ experience. Responsibilities
ranged from dealing with research exten-
sion, and quality aspects of a commodified
product and the dynamics of a vibrant ex-
port market; experience that would come
in handy as DG of Shipping.
According to her, coffee is one of the
most globalised commodities and the sec-
ond-largest traded commodity after oil in
www.fairplay.co.uk
LAKSHMI VENKATACHALAM
terms of futures trading. Throughout her
tenure, she worked tirelessly to raise the
profile of Indian coffee in export markets.
In recognition of her efforts, she was given
the Coffee Statesmanship Award by the
Specialty Coffee Association of Europe in
2005. “Coffee was a very rounded experi-
ence,” she said.
When her time as DG ended in June this
year, Venkatachalam took up a new posi-
tion as a vice-president with the Asian
Development Bank (ADP) in Manila for a
three-year term. Shipping will remain on
her agenda as she will explore ways to
develop an array of products conducive
to financing the private sector in shipping
– ADB, for example, is a shareholder in
Mundra port in India.
Venkatachalam admits ruefully that
her career has been her main concern
and she has remained single, but she still
maintains her interest in music, having
originally been trained in Indian classical
music. “The spark is still there,” she said.
“Occasionally it gets ignited by the right
set of people.” F
decision-makers
In the spotlight
Lakshmi Venkatachalam
Age: 57
Current position:
June 2010-: Vice-president (private sector and co-
financing operations), Asian Development
Bank, Manila
Career:
2008-2010: Director-general of shipping,
Directorate General of Shipping
2005-2007: Principal secretary, Government
of Karnataka (commerce and industry,
urban development, planning)
2000-2005: Chairman of Coffee Board
1995-1999: Commissioner, Bangalore
Development Authority
1990-1995: Director, Ministry of Steel
1978: Member of Indian Administrative
Service
Education:
1988: Master’s degree in economics and business
administration from Boston University, US
1975: Master’s degree in English from Jadhavpur
University, India
Interests: Music (trained in Indian classical music)
“I’m also a Western musician. I do a lot of singing and
play the guitar”
8 July 2010 33
 movers shakers
Decision-makers from the worlds of energy, mining, manufacturing, industry, commerce and agriculture all
affect shipping. Fairplay reports on the great and the good

Pacha to boost Board appointments at Sovcomflot

broadband at sea
David Moorhouse (left), chairman of Lloyd’s Register
Esteban Pacha, director of the Inter- Group, has been elected member of Sovcomflot’s board
national Mobile Satellite Organization of directors. Together with Marlen Manasov, member of
(IMSO), has been designated founding the BOD of ZAO UBS Bank, and Viktor Olersky, deputy
commissioner of the Broadband Com- transport minister of Russia, he is one of the three new
mission for Digital Development. appointments in the Russian carrier’s nine-strong board for
Backed by the UN, the commission was the next year, elected on 29 June.
established by the International Telecom- Re-elected board members were: Sergey Frank,
munication Union and UNESCO and aims Sovcomflot president and CEO, Sergey
at providing policy guidance to extend Naryshkin, chief of staff of the Russian
the availability of broadband worldwide, President’s executive office, Sergey
including at sea, in the context of the Kudryashev, Russian deputy minister of
Millennium Development Project. energy, Charles Ryan, chairman of UFG
Pacha is to attend the first meeting Asset Management, Morgan Stanley’s
of the commission, which will be deliv- Elena Titova, and Nikolay Tokarev,
ering its final report on 19 September. president of OAO Transneft.

Jumbo extends its reach Norton Rose boosts

dispute resolution
Seeking to strengthen its presence in the Asian and Australian markets, the Dutch
heavy-lift transporter, Jumbo Shipping, has opened two offices, one in Beijing and Marine insurance and shipping dispute
one in Perth, within a week. specialist David McKie has joined Nor-
Jointly run with China Shipping, Jumbo’s Beijing branch was inaugurated at the end ton Rose’s dispute resolution practice
of June and will be managed by Simon Jiang. According to Jumbo, Jiang and his team, in London as partner. With 14 years of
aided by Jumbo’s Shanghai office, which opened in 2002, will work on further strength- experience in the London market, he spe-
ening the company’s position in the Chinese project cargo and heavy-lift market. cialises in resolving marine hull, marine
Meanwhile, Jumbo’s new office in Perth, Western Australia, will be managed by cargo, marine liability and offshore en-
Sjoerd Meijer, who started his career at Jumbo’s headquarters in Rotterdam in 2003. ergy insurance and reinsurance disputes.
Meijer has worked as project manager for a number of Jumbo’s projects in Asia and the Anthony Dutton, head of dispute
US since 2007. resolution at Norton Rose, commented
In his new role he will seek installation work for Jumbo’s two DP2 vessels, Jumbo on McKie’s appointment: “David’s long-
Javelin and Fairplayer. standing and extensive expertise in
marine insurance and shipping matters
will add further depth to our practice.”

Johnston takes the lead

Alan Johnston has been appointed honorary
president of the UK’s Society of Maritime Industries,
succeeding Paul Lester who had held that position
since 2005. Johnston, who is managing director of
BAE Systems’ Surface Ships division and co-chair of
the Marine Industries Leadership Council, com-
mented on his appointment: “I am a firm believer
that the UK maritime sector should be represented
by a strong trade body and I am honoured to have
been appointed as the president of the Society of
Maritime Industries.” He added that he is looking
forward to “helping to protect the interests of our
many small- to medium-enterprises, whose inno-
vations are vital to our sector’s future prosperity.”

www.fairplay.co.uk 8 July 2010 35

shipping in numbers
$24Bn 2,127 €30M
3.5M tonnes
Annual import of LNG
by Pakistan through the Closing value of the Baltic
European consortium 4Gas. Value of trade between Brazil Dry Index on 6 July, its lowest Aid from the French and
The agreement includes and Africa. It has grown from since the beginning of the Spanish governments to
building a terminal at   $6Bn since the beginning of year. Its peak value was 4,209 the cabotage scheme to be
Port Qasim 2003 under President Lula on 26 May 2010 provided by GLD Atlantique,
a joint subsidiary of Louis
Dreyfus Armateurs and

26%
Grimaldi, linking Nantes-Saint

3.5%
$250M
Investment in Nazaire with Gijon. €4M will
Expected construction of a also be received from the
annual increase in global 1,380m deepsea EU’s Marco Polo motorways
fertiliser consumption dry bulk jetty at of the sea programme
between 2009 and Oman’s Sohar Oil production in the Gulf
2014, according to the port, being of Mexico shut in due to
International Fertilizer built to support Hurricane Alex. Natural gas

2011
Industry Association. Demand Vale’s iron ore production was reduced Date by
for nitrogen and phosphorus pelletising plant by 14%, according to the which the
is predicted to reach 187.3M and distribution centre. It is Bureau of Ocean Energy International
tonnes by 2014, and 158.5M due to come into operation Management, Regulation Labour
tonnes for ammonia in 1Q11 and Enforcement Organization
expects the
Maritime

$115M
$3Bn Forecast value
Labour
Convention
of exports of timber products to be
and finished wood products internationally ratified. The
from Vietnam in 2010, tonnage qualifications have
according to the Vietnam been met and it is expected
Credit secured by Karachi Port Trust from the World Bank for the Timber & Forestry Product that the requisite number of
reconstruction of berths as the city’s east wharf to accommodate Association, up from   ILO member states will be
100,000dwt vessels by creating a 922m quay wall and 16m draught $320M in 2009 achieved by early 2011

There is so little fairplay in the world. If our own efforts succeed, we shall have taken the first steps towards
promoting the habit of calling things by their right name and looking at them through uncoloured spectacles…
Founder: Thomas Hope Robinson, Fairplay, 18 May 1883

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Executive Editor:  G Paul Gunton Production:  Sarah Treacy, Rebecca Bailey
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Americas Advertising Sales: Carmen Avila
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Email: carmen.avila@ihs.com Buxton, Derbyshire, UK

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36    8 July 2010 www.fairplay.co.uk